Good morning from Cape Town

Whew – what a wild week! World stock markets and commodities tumbled, whereas government bonds and the US dollar surged amid mounting fears that the ongoing turmoil in financial markets was foreshadowing a hard landing for the US and Europe.

Now that the bailout deed has been done, attention is shifting to whether the plan will work and break the logjam in the credit markets. What do you think?

Read the views of a variety of commentators in my weekly “Words from the Wise” review: http://tinyurl.com/3lsla6

Be careful out there and remember the old adage telling us to hope for the best while preparing for the worst.

Kosmo is telling everyone to sell...now. Now? Where was he six months ago?

Canadians

Are RRSP's scrambling for gold?
Is that why CEF.A is bid up over $1 pre-market?

Reminiscent of what happens when there's only one chair left in musical chairs

Good morning from Pennsylvania, home of the National League Eastern Division Champion Philadelphia Phillies.

Here are your Cara 100 Ratings Changes in play this morning:

ADBE - Downgraded to Market Perform @ Friedman Billings

KO - Downgraded to Hold @ Deutsche Securities

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

Have a great day.

I am considering POT and then writing a Jan call. any thoughts.

ugly, schifosa...let's see how traders play it today...

Timing, it is said, is everything in life.
In our game it's even that much more crucial.

as always, im curious how the gold miners will hold up w/ bullion rising but the overall markets lower.

miners/gold ratio set to make new lows or are people going to begin to recognize the value in the beaten up mining shares over the metal?

good luck to everyone, things seem to be changing on a dime

Will sell the one that are green like PFE/GG/SLW and
Also TBT which is closed to even and use this money to buy more
QLD/SSO/UYG/CAF
There will be more return in to this ETF than TBT.

I can't shake the feeling that stocks have been in an enormous bubble similar to the real estate one, and given liquidity/credit issues, Johnny 401-K's diminished place in the global scheme, etc, that those excesses have yet to be fully wrung out of the system, but it's just a feeling, nothing more.

Scotia Capital Edge Report/Oct 06/08
Maintain Sector Outperform

Yukon Silver Rush Michael Parkin, MBA, P.Eng. -
Event
■ Silver Wheaton announced a silver stream deal with Alexco Resource Corp. (Alexco) on
their Keno Hill Project.
What It Means
■ Silver Wheaton has purchased 25% of the LOM silver production from Alexco's Keno Hill
Project, located in the Yukon Territory. Keno Hill has very high grades, which rank it
among the top 3% in the world.
■ The deal calls for an upfront cash payment of US$15 million for underground development
and the remaining US$35 million to be used for mill construction. All funds will be drawn
from the existing line of credit. In addition, Silver Wheaton will pay the lesser of $3.90 per
ounce delivered or the spot silver price.
■ The project should add approximately 800,000 ounces a year to Silver Wheaton's silver sales
and, in our view, there is significant upside potential to both extend the mine life and
increase production.
■ We maintain our 1-SO rating and our one-year target price of $20.00 per share. At this early
stage of the Keno Hill project we show it as neutral to NAV. Silver Wheaton is extremely
attractive in our view for such low-risk production, trading at only 0.80x NAV

Long 25% of position

vinod- OK...can't do a thing myself, it's like being on the ropes with the other guy jabbing at will...(and it's hard to see them making Rocky XV with Stallone in a wheelchair rallying his fellow residents down the ramp)...

By the way this dude I know through a friend of a friend who was "fund manager of the year" several years ago (by loading the boat with risky housing and mortgate stuff during the end of the runup) is now trailing the indexes by about 20 percent, So it's starting to seem to me that he is reverting to the mean in more than one sense of the expression.

So many of the "professionals" never knew squat about managing money, and times like this are the proof.

POT - showing off ~7.50 in pre-market

2nd
nothing wrong with GG/PFE/SLW/TBT. but going with one that will give me more return.
still has 35% cash and will use them all if we go under 9500

woof, 8% hit in a week for my account. still positive for the year by several percent. but ouch!

from a little weekend research (regrettably left the work at home) over the last 50 years, the worst for the S&P is about -28% from the 200dma. as of friday we were somewhere around -17%, and it only got pounded that much on a few occasions. when that did happen, the mid to high -20% area soon followed, always within a couple days. i think only once in that time period did it get this far below the 200dma and that percentage begin to recover.

today seems to be following through on that statistic: the recent pounding below the 200dma getting worse, probably going to be in the low -20% area.

the S&P value ultimately did recover from the lower prices at these "% of 200dma" extremes, it just took a few months. several months in the cases of 1964 & 2001, if i remember correctly from my excel sheet. very quickly in the cases of 2002 and 1987.

anyway - it's a quick, fun exercise in excel if anybody wishes to play around.

also, i *think* the put call ratio was over 1.3 for two days in a row, which was also a signal that occured at major turning points over the last 16 months or so. again, fun to play with in excel, and plot out occurrences vs. the indices.

need some fun in this market...

holding QLD and underwater. waiting for SPX -25 to -28% of the 200dma before i go all in with some SSO. i should probably repeat the above exercises for the nasdaq... no time!

best of luck everybody.

Woof indeed.

vinod- well, then i picture you more like hugh jackman taking hits while finishing his cigarette, before unveiling his claws...

Alright, I'm preparing to time this thing today. So far GS is down 6% for the day on the open. and SLW is bouncing between 7.07-7.2.

Should be fun.

Going to be crazy to see a 9 handle on the Dow.

2nd
look at SMN/DUG I sold them under 30 month ago?

GOOG down 19% straight out of the gate. A Cara 36, btw. When to buy?

Pay attention to the Great White Shark, it'll save you fromk getting a RIMM job or from buying any rotten AAPLes.

anyone know why the HGU (beta pro gold miners x2) is frozen at this time? the other beta pro's are moving????

vinod- i see that...try looking at QLD/USD/SSO when the fog clears...

shark- we're going to remember that in boston...;)

you'll be invited, btw...

You'll have to hand it to Bill if he's right and we're near a low. I think he's the only bull out there!

BRKB down $220/share.

Have something to do with GE being down another $1?

Will be looking at marine stocks like BC since this market is way underwater.

If BC was a good deal at $14 it must be a great one at $9?

Shark_attack,

Thank you for the "get out now" talk from last week. Saved me thousands in SU and CCJ--I'm 100% cash and waiting for the knives to bounce off of the floor, not trying to catch them in the fall.

MOO!! (not the symbol, the bull sound!!)

I'm following Bill! fingers in ready position

Hi!

Gold put in a higher low, and appears to be headed to a higher high.

Bullish on all timeframes.

Time to let the proffit run, imo.

Please DYODD

Enjoy your day.

Cheers!

Cara 100 Update:

GRMN - Downgraded to Underperform @ RBC

Re: ¥

Japanese Yen running hard against all currencies, except the Yuan and the Dollar.

ok im pissed, just got off the phone /w my bank and they have no idea why the HGU is currently not trading.

this is $#*#$*#*#

VIX at 49.30 and the DOW is 80-some points from the 9,000s.

i'm showing HGU.to trading on the Fidelity platform, currently up 7.63%...

yup just started now. thx 2nd,

though im disappointed its at $11.50 while gold is at $870

i supposed the broad market is still pulling down the shares

2nd, I see you and I are playing rope a dope....
Just tighten the ol' abs....

9800 is the projection that technicians are watching from the recent H&S pattern in the DJIA.

For the S&P 500, the projection was 1087 from its recent H&S pattern. The S&P is currently at 1069, so that level has been broken.

As I stated back on September 29, I felt that the September 18 lows in the major indexes would be broken to the downside. My views have not changed.

The need to raise cash and get liquid is urgent for many companies and individuals as credit continues to dry up. I think the U.S. market will continue lower until valuation levels are more compelling, which will in turn bring cash from the sidelines back into equities.

As the market flushes down the toilet, keep your eyes open for stocks FAILING TO MAKE NEW LOW's ... that'll be a great tip-off of strength in the next bull, I think.

what when it breaks 10000
expect it to bounce up hard?

We're going to have one heck of a party in Boston...Better yet let's wait 'till next summer and meet up at Vinod's place in Wellfleet:) Bring your suntan lotion!

I love hearing about people saving money by the way.

craig- i prefer the 12oz curls, but it's too early in the day for that...

Boy.
So difficult to see this market making lows every day. Will the market ever recover with so many contries having similar issues?

Especially, when the confidence of investors is shaken to the core.

I am finding it difficult to see how the markets will even enter a bull phase so early. But then I am a lesser mortal than Bill. And I do not have experience that qualifies me to make that kind of statement.

I hope for all of us that Billis right.

Currently 100 % cash.

shark_attack
It is a deal
and I will pay all expense except airfair

goodbye 10000, nice to know ya...

just broke 10000

vinod- you don't know our drinking habits yet..

No you wont! 2nd is paying for the booze and the lobsters and clams and you can show me where to do the clambake!

RIMM is screaming buy me...

Sandy

100% cash is a good place to be at this point.

There will be more downside, more than many think possible or reasonable, IMO. But that's how markets work in periods of crisis.

There really is no need to try and guess the bottom as there will be time to watch the market hit bottom, settle down (from a volatility standpoint), bounce around for a bit, and then pick through the best, most financially sound equities.

Buying into a plunging market can sometimes work and make you money, but it just as often results in losses as the market falls further than expected.

Just one person's opinion, as always.

Get ready to pounce on GS... 12% down but still free fallin'

I think I'm at hurl point with my PUT shorts! SU, RIMM, and QLD specifically!

[Bill Cara note:

If you were hedged in gold, you wouldn't be so upset. The DJIA is down -3.6% but Gold futures up +5.0%. Besides the lower prices go, they become even more attractive.]

Wavesmash....Dont listen!

I shouldn't say that. This may be an awesome buy oppty, but I won't be following you in ok?

There's nothing about today that has me feeling that anything good will be happening anytime soon. Vad what do you think my man? 2nd? How do you read this thing?

My thoughts are one needs to see RSI 7 day <10 and the MACD hourly diverging. That'd be capitulation. AND max pain for Nov at least 20% higher than current prices.

For instance CNW capitulated last week (long at 33.85). YRCW appears to be doing the same. No position in YRCW

JMO, do your own DD.

puke point approaching,
miners down hard w/ the market,
i dont see how a bounce happens here w/ everything being sold indiscriminantly.

but lets see where the days takes us. im trusting in Bill's call here.

see the way the gold stocks are falling? Theyre always stocks first and gold third, which is the problem with using them for a gold play in the face of calamity.

agreed shark,

i never believed they would act this poorly in the face of strong gold prices.

though wouldnt it stand to reason they will perform very strongly if the market overall begins to rebound?

GS just bounced off $115 after falling over 12%. Wonder if this is the moment Bill was referring to.

shark- i'm trying to put myself in a buy-and-hold frame of mind to gauge capitulation...if you're down 30-40% in your retirement accounts and you wake up to this, that might do it...i still think it goes up (but then, i'm also still in positive territory right now)...

Lucky. I was also watching GS and it did seem to turn sharply. Of course this note is extremely temporary given today's volatility.

Nokia NOK P&F.

http://tinyurl.com/47up5z

OOOOOAO!

Sitting on my hands watching PetroCanada hit a reef.

Another 700-800 down day on TSX?

Though it hasn't been mentioned the airlines are quite unrelated to oil prices now

GE back above infomercial pricing.

So far, DELL at 14.8 and failing to make a new low (which would be 14.5 or lower).

Say hello to Black Monday.

"Goldman Sachs (GS) Top Executives Agree Not Sell More Than 10% Of Their Shares For Three Years" (http://tinyurl.com/4nzf5o).

Well, it looks like they decided to go all the way today...

10 day ATR for DJIA is 384. Just an average day today so far albeit unpleasant.

SLW in lows 6s now. I don't know if i have the cajones to pull the trigger. It is harder than I thought.

Curiously, GS bounced @ $115, which is exactly the price that Buffet agreed with GS on the warrant to purchase 43,478,260 shares of common stock for an aggregate purchase price of $5.0 billion in cash...

There is some absolutely bizarre action going on in currency markets:

Aussie Dollar -8%
Brazilian real -6%+
Mexican Peso -5%
South African rand -5%

Japanese Yen +4%

Yep, nothing like having FREE markets. Bill sure can call them.

tsx dowm 950 points...... WOW

SV

What I don't like about Goldman is a big daily downgap (although the size pf the gap shouldn't matter) it's a bearish continuation pattern in this case and augers for down, but you didn't need me to tell you that right?

And yamana's 6 bucks. Does it go to 2?

Really hard to buy when the sky is falling
but some really good deals out there

sv

Like a spring. if you press too hard it will bounce back too hard

Somebody please stop the freefall in SU!

I've only got my 401k to play with and I've been buying on the dips. But this drop doesn't want to appear to stop.

97 handle...

Dow down nearly 500. NASD about 125.
Its been very long since I saw these numbers.

Wow!! down is down 585.NASD 135

If this helps I capitulated like a little baby! Probably time to buy. Because I am Billy six Pack.

Guys, it's called TOTAL SYSTEMATIC BANKING FAILURE WORLDWIDE (sorry didn't mean to shout)

I was telling everyone I knew that last weeks "news" (the bailout) wasn't the news at all. The news was total systematic banking failure.

now we're getting closer to panic.

SU/PCA/ECA etc.

Is business model on oil sands still valid with Oil under $80/barrel?

According to PCA it takes >$50/barrel to break even. That was with 2007 input costs, interest rates, and credit environment.

Gold
I am seeing a possible bearish divergence in RSI7 in the 60 minute chart in today's price action

And the only reason Goldman isn't at 80 right now is the guys on their prop desk are buying the bejabbers our of GS.

but...no capitulation shown on the major averages.

GS bouncing off Buffett's $115 again. Hmm...

Shares sell:buy 230:1

This is not black monday

This is bloody monday

sv

I'd suggest placing stink bids for the stuff you like, the broker systems may freeze if we have a true crash and you miss nice entry point. Good luck to everyone.

CDNX approaching 11.60. it's getting close to capitulation.

anyone see a green close?

Well, its black monday on the TSX, that's for sure.

Yep the wild west is alive and well as the TSX plunges 1000+ points. NO circuit breaker unless the DOW drops 1100 points, nice.

Do you think Boeing employees on strike might settle after today's action?

Looking hard @ DIG. IMHO, this one's an easy triple in 1-3 years.

23% of DIG's holdings in Cara 100 XOM

I bought SQM, FSLR, UPL, and CLF for my retirement account this morning. I lost my connection to Schwab, and haven't been able to get reconnected, but the trades were already completed. I am off work this week and my trading is not for immediate income, so I am just watching the carnage with some amusement, even though my IRA has taken a huge whack this am. This is what panic looks like, which is the time to buy, not sell. If I were trading for immediate profits, I would hate this market, but for the long term I love the action here. Capitulation is what we need to generate some real upside.

Aussie dollar -11% ?!?!?

Worst birthday ever! Anyone else born on sv's "bloody Monday"?

ABC just interrupted regular programming with a special alert on the stock market. Calling it capitulation and frightening.

Covering 2/3 of the RTH/XLY shorts. Starting daily knife catching practice. Wish me luck.

Oh My God

Looks like Walmart bought the Toronto Exchange and put on one of those "smiley faces' sales.

Added to SLW.to

Anybody buying HBU>to (no position...yet)

BH- would definitely be selling puts on SU...

Tim Knight just turned bullish. Also says China capitulation complete.

http://slopeofhope.com/

2nd, Europe is off 7-9 mpercent across the board. If we close green I will pay for the clams!

Tsx down 1160 points

Canada getting whacked

sv

[Bill Cara note:

I was interviewed on Saturday by Derek Morris for iStockAnalyst. You can catch it here:
http://www.istockanalyst.com/radio/podcast100608.html ]

Is it just me, or are there no PUTS options available below $25 for SU? Is this a result of it having simply dropped so far so fast?

MOS - starting to slowly peel off NOV 30 puts. The VIX is backing off slightly

DE capitulation. RSI 7 <10, Max pain Nov 50.

One cancels other order buy limit 35.52 or buy stop limit 36.40 stop/36.50 limit.

long YRCW at 7.16

Holding on to my bleeding miners. Hoping for a global coordinated rate cut here...
Just blew the top off the 10 yr $VXO chart...

Russell 2000 rsi 7 day at 21.

TSX only down 1.12% according to their web site.

http://www.tsx.com/

Guess this is like $1.00/litre gas... just couldn't happen.

Bill

love reading your comments

you must be next to your computer
targeting your next company to buy these are interesting times....

sv

Congrats to any of you buyers of CCJ @ 16.xx and SU buyers at 26.xx

I lucked out.

My broker decided to move to another firm (I started with his father in 1969.) and I am following, so my accounts are all in limbo with 85% cash, 10% 3 month Ts and the rest in bullion.

Good time for my to sit back and read Bill's book in prep for picking up the goodies. I am still basically an investor at my core, but plan to set aside a percent for trading when I get at least some kind of foundation of understanding the faster moves.

I'm still just guessing based on observing for decades, but when the "good" stuff keeps getting sold (gold stocks) isn't it likely someone (hedge funds?) just needs all the cash they can grab to cover the pile of crap?

An aside: Funny thing about perceptions. In 1987 I got stopped out on everything and jumped back in less than a week. (Should have waited a couple...) I was working and my business was good, so I was pretty much unconcerned.

That was far worse (%) than lately, but now I'm retired as are most of my friends and much more bothered. I that in addition to no other income the speed and amount of news is making this into more of a "crisis" than it needs to be.

The TOG — tailor made for the HB&B Bill talks about.

If you want reasonably up to date index quotes for the tsx, goto http://www.ctv.ca/business or http://www.globeinvestor.com. You can go back to tsx.com as soon as it is back :-).

Obligatory conflict of interest declaration: I am just trying to be helpful here, but I have a conflict because I work for the Globe and Mail (which is a sister company of CTV). Therefore, feel free to delete this message if it violates rules or guidelines.

TSX web site fixed again. :)

Tailor made and the COMEX gold neatly roped off for the big money by white gloves.

"[Bill Cara note:

If you were hedged in gold, you wouldn't be so upset. The DJIA is down -3.6% but Gold futures up +5.0%. Besides the lower prices go, they become even more attractive.]"

I did buy some XGD in my RRSP account at the end of last week, but that's obviously not as good as GOLD. Still, I was not expecting such RADICAL drops in RIMM and SU!

PGH was at $10.38, pays over 2.60 div.
Good grief! Was forced to add...LOL!

Markets are now fighting the daily VWAP (on QQQQ and SPY).

Listening to Bill's interview on iStockAnalyst. This is the first time I've heard Bill's voice. Somewhat strange to hear his voice after 3 years of reading his thoughts!

Bought bce 33,10

buyout if it happens is $42.75

sv

Dividend players: October white sale!
CHSCP Not at the low but it doesn't move much. See really long chart.
PGH Canroy, killer deal. Hit 52 wk low today...down $3 or so from previous low.
CNSL Regional phone co, nice div, new 52 wk low.

For the Cramer Contrarians among us, he says it's time to get out of stocks:

http://www.msnbc.msn.com/id/27045699/

Hopefully for us longs, we have witnessed the "turn" Bill called for this morning.

Imagine this: a royal plunge below DJ 10K, quick snapback so the train leaves with as few people as possible... Green close, green close...

Somebody's program trades kicked in at 10:45am.

http://tinyurl.com/3tuhax

RIMM is almost back up to where it was screaming buy to me.

Here is a link to the roll call voting record of the H.R. 1424, Emergency Economic Stabilization Act of 2008.

http://tinyurl.com/bailoutyesvotes

I hope we will see the American people punish the "YEAS" in the upcoming elections.

I see Cramer like the Coyote.
Hit's the ground and his ACME parachute poofs up afterward over his smashed body.

Bought some Fortis Inc (FTS on TSX) today. This one is a buy and hold for me!

Newfoundland!

Re: Gold Lease Rates

Gold Lease Rates are climbing since the beginning of the month, meaning there must be a heck of a lot of bullion leases circulating the markets.

"2nd, Europe is off 7-9 mpercent across the board. If we close green I will pay for the clams!"
Posted by: shark_attack at October 6, 2008 10:59 AM

shark- since you took the liberty of volunteering my wallet earlier, just put it on my tab, man...

Anyone noticing how well XOM is holding?
Oils sold like mad....XOM down 1.22%, PGH *was* down 23%, similar to SU/ECA, etc.

29 years ago today the last decent Fed boss we had stepped up to the plate. A man with stones who took tough, arguably brutal, action to decisively do what had to be done.

Things sure are different now.

Nice Podcast Bill. Not only do you read like a considered gentleman, you sound like one. Good one Mate!

Stephen

FTS for me too!

Looking at ERF.un (16.74% yield !

Re: Cramer

One of the problem children of the post inflationary boom.

Tsx was down 1168 points

now Tsx down 628 points

WOW...Bill the turn has begun

sv

FWIW.......I have been keeping track of major indices as they approached the 0.618 Fib level from the highs made back in Oct ' 07

This mornings lows brought the indexes to the following retracement levels:

Cycle High Todays Low Retracement
NAZ 2861.51 1810.63 0.632753337
SP500 1,576.09 1,027.18 0.651726741
DJIA 14,279.96 9,738.30 0.681955692
R2K 852.06 579.65 0.680292468

We're more in need of gentle laxatives than shock therapy, Mike.

"The movements in the FX market are incredible. One friend just read me something which he has received from an fx trader which said that the only things that anyone desires to own are the US dollar,the Japanese Yen, gold, bottled water and bullets!!!"

From http://acrossthecurve.com/

The blog that provides one of the best views inside the bond markets, in my opinion. If you recall Noodle's great input here, this guy's blog is like that times ten.

Example - most recent post:

==============================

IG 11
October 6th, 2008 11:05 am
The corporate bond market is more illiquid than usual. There is virtually no trading. Everyone wants to buy protection but there are no sellers. One salesman noted that the only sellers of protection are less than credible counterparties.

The IG 11 was 180/183 last.

=============================

That doesn't sound too good.

Anyone get GG at the low? I missed it....
Heck and dang!

Ok, point taken. Don't put the shock therapy on the head.

Oilexco (OIL), the darling of many analysts, down 37%. No position.

SDA @$7.50. People still have to eat no matter what. You can't eat a Blackberry or an Ipod.

Bill: great interview!

Talisman Energy

TLM.to.Picked off starting position @11.83.Walmart 1/2 price sale.High risk!.....high return?).

F6: You are probably correct. It also seems we've added layer upon layer to our house of cards in those 29 years, and so a similar shock might be a bigger risk.

But what do you do when you are full up with the laxative and you aren't producing desired results?

What's the financial equivalent of a big fat burrito from Boca Grande in Cambridge, MA? One of those babies always got things flowing for me...

(TMI?)

IBKR...in the green for now.

TSX now up 6% from this morning's low. US Markets up a couple of percent.

Did someone say how much money is waiting on the sidelines....to be invested

sv

I fully expect that Metamucil is about to become very popular.

beano is working for gas prices.

gradually buying since last week in my 401k act. Sucor is $28 now. Unbelievable!

Very interesting article from the Guardian: Iceland's economy on the brink of collapse. A supermarket chain says it doesn't have the means to pay for food in foreign currency and this has caused a panic:

http://tinyurl.com/3ryk6x

"see the way the gold stocks are falling? Theyre always stocks first and gold third, which is the problem with using them for a gold play in the face of calamity. "

at the moment thats the right thought I guess, but it has not always been that way.

S&p fell from 1500-800 while the hui went from 35 to 157

That was an envious relative performance

Frankly I am really crushed by this action of gold stocks and I dont undersatnd it when some could be bought for large % less than the cash they have in the bank.

ALOHA!!

So, Hank and Ben and the entire US CONgress go on national TV and pledge that this $700bil bank bailout will "save" everyone, but yet the carnage in the markets continue on and banks still consider other banks more risky than US DEBT(US Treasuries)! HEY BANKS ... HERE'S A NEWS FLASH ... ITS ALL BAD DEBT! NOT EVEN THE USA WILL REPAY IT! Klues-R-Us has a blue light special going!

I am seeing my "C WORD" mentioned much more, even in the mainstream media(internet as I have no TV). What happens when the US Peso/bond lemmings realize that America and its MOUSE MONEY is no bastion of safety at all but instead the MOST exposed country to the death spiral of derivatives and DEBT than any other country in the World? What happens to banks when they have no more big banks to consume and they then are forced to stand on the merits of their MERGERS financials? I already see Bank America's CountryWide purchase being ridiculed as the "liability side" of that merger exerts itself. Then there is the US FED's own balance sheet where now they are being forced to lend to more and more companies and even States like California and lets not forget the US FED now has to cover higher FDIC coverage($100k to $250k). Announcing California is insolvent does not look good for CA bond holders and if we had a competent credit rating system in the USA then California may even get a downgrade. What about a downgrade on the US sovereign credit rating? HA!!

Whats the US FED do next? Lower rates looks highly tempting. What the heck, the rest of the World's central banks are doing it! Only look what country has very little room left to lower! Couldn't that be looked at as a measure of future viability in terms of exposure to toxic derivatives and debt fundamentals?

Its all boiling down to "liabilities exposure" and who has the least of them. If 90% of the toxic derivatives and sub-prime originated in the USA with US Banks, then what does that tell you? Sooner or later people and banks, especially central banks, will revisit their logic on the "barbarous relic", which is not looking so barbarous now! What good is interest and dividends when monetary debasement owns you? The integrity of FIAT is at the forefront and that is where the FIAT KINGS least prefer to be ... in the spotlight!

Here it is ... the US TAXPAYERS reps in the CONgress have given the greenlight to the FIAT KINGS to perform and they aren't, so where does that leave their credibility? Today the US CONgress looks like the biggest fools on the Planet! Its a title they richly deserve ... MORE FAILURE PLEASE-E-E!!!

GARBAGE IN ... GARBAGE OUT!

Anybody who knows anything about tweaking video signals knows that is the LAW! It most assuredly looks like that is the LAW for FIAT as well and all that FIAT embeds which is mainly ... CONFIDENCE! How safe is "FAITH AND CREDIT" anyway? How long will that be accepted as the REDEMPTIONS keep flowing!

REDEMPTIONS ...

I have been speaking to "monetary insurance" for years here and at other cyber pubs! One of my points was that we take out insurance for health and cars but not one Joe Average in America considers insurance for their money! That's why gold is not a commodity, but those in control of the futures markets want you to think otherwise. See commodities main claim to fame is that they get "consumed", but gold does not. Even if you have gold on your teeth you can still cash it in, so even when its "semi-consumed" its not consumed! Explain why gold is listed as a commodity then? The FIAT KINGS do all they can to make you believe gold is not money, but its not a commodity either! If gold is so worthless then why is still around and more to the point why is it still increasing in value and decreasing in supply?

I still see the "supply issue" as the SLV(silver) bullet for the global gold ETFs like GLD! As soon as you detect consistent rising gold prices but no corresponding rises in GLD inventories it is time to sell! When central banks start buying, GLD will be toast because GLD will be competing for the same limited supply only GLD has no printing press. That can happen like so many things in these FIAT markets ... ON A DIME!

With all this "panic" I find it odd that the fundamentals of why this panic is here have yet to be "cured". Is it really just "frozen credit"? If the banks suddenly started lending to each other again what does that mean? Is the debt gone? Is the HUGE government spending gone? Are entitlements and welfare fixed? Are people done eating and drinking? Is China going back to a rural economy? Is Russia de-arming? Is the US leaving Iraq? Is the US FED gone? Is unemployment back down to 3%? Is California solvent? Is Africa prosperous? Is Osama in jail? Is Pakistan de-nuked? Are Israel and Iran best pals? Will anything have changed other than banks are lending to each other? The systemic risk both domestic and geopolitical still lives on! So far its all about BAND AIDS!

Our global FIAT monetary system is broken ... What a shock all the global currencies are in a "race to debase"! So long as that is never addressed then "instability" will rule!

THE ENTIRE WORLD IS ONLY AS HONEST AS ITS MONEY ...

re gold stocks:

my feeling is that if the market can settle and begin a slow grind upwards, the gold stocks specifically will be poised to outperform, hopefully w/ the metal back up the rise.

the question being will people see the value in a gold stock down so far w/ gold up and poised to go higher or will they instinctively stick w/ the metal?

I think they lean to the metal due to difficulty with financing for operations and the metal being the pure hedge. Some I'm sure are positioned, but others will be looking for credit to mine money. Disclosure: long GG/GFI/GSS.

WB halted......... on pending news announcement

Oilexco is the cost of a Big Mac combo. $5.00

Thoughts?

Anyone know if they have a financing situation that is serious?

90% cash (jumped in 10%, 2 days to earlier it looks)

I guess today will be a good one as any to put some stocks in my portfolio.

Pres Bush is speaking in a few minutes....

kaimu - no government is going to allow its citizenry to replace fiat currency or even barter with gold unless that government also controls the gold. But the governments do not want to use a currency that has a physical supply limitation because that will make it impossible to deficit spend and that is no fun at all.

In 1933, Franklin Roosevelt, outlawed the hoarding of gold by presidential order - no vote was taken by the Congress. I doubt they were even informed the order was coming.

So, why do so many people seem to think that gold is some kind of savior because when you really need it it will be illegal to do so?

Just another relatively orderly sell-off on moderate volume. If this is the bottom it is giving lots of chances to get in here. Not likely in my opinion.

Re: Gold Spot

Its really academic whether gold will advance in the coming weeks, since investor demand has caused a run on bullion and coins with the street price trading far above the spot price.

I'm not sure if PG(Metamucil) is trading at bargain levels, but its for darn certain that the junior gold sector is down and out.

I wonder if Greg McCoach picked up his favourite bottle of distilleries when he went back to Denver after the Cambridge House Resource Investment Conference this weekend. I'm sure he'll have a hard time explaining delivery waits to anxious customers demanding immediate delivery.

In what Curry called a “dramatic statement,” Cramer emphatically urged any investor who has money they may need in the next five years tied to stocks to pull their dough out.

“I thought about this all weekend,” Cramer told Curry. “I do not want to say these things on TV.
“Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”

Is it just me or does the dow drop 100 pts everytime bush speaks.

Thanks for that piece of info QT. This could be another good contrarian indicator to back up what Bill has been telling us.

Hello out there:
Where do I buy bullion? i was going to wait for a show in Houston, but I don't want to wait. or should I?

Thanks Cramer, now that the market is off more than 4-5000 points.

Reminiscent of Maria's "list of stocks to short"

IMO, Cramer's been fomenting panic, on purpose, for a week or so now, ever since his call for everyone to get out because the market was going to go down another 1,000 points or more. I can't remember where the market was then, but probably at least 1000 points higher (have been out of touch, due to hurricane repairs). Anyway, figured he was talking his book, knew the overall playbook, and was helping out his friends who were overall short. Whatever else his comments may have been, they were, and are, certainly as irresponsible as shouting fire in a crowded theater. And, worse, he knows that.

I took a screen shot from Kitco.com when the currency rout vs. the Yen and the Dollar was at its deepest. This is a solid factual demonstration of why gold is a performer, that its price feeds back from other currency declines into reference currency, unlike other commodities:

http://www.flickr.com/photos/11747277@N07/2918149449/sizes/o/

reviewing my DE buy. It has capitulated IMO. However I thought the MACD hourly had diverged. I believe now it may make another price low below the LOD and provide a better entry for others.

Do ur own research.

HEADS UP FOLKS !

Bill has posted an ADDENDUM 12.35pm ET

Lehman's Fuld in the hot seat right now on CNBC house oversight committee. Almost half a billion in compensation since early 2000's.... amazing.

[Bill Cara note:

Fuld's counterpart at the bigger and stronger Goldman Sachs was, from the late 1990's until June 2006, Treasury Sec Paulson. He didn't make less than Fuld. Whether he reported it, or was able to hide it more effectively is a different matter. When somebody listed Paulson's compensation in 2004 and 2005 as just a couple million, I stated flat-out I would bet a dollar to a penny that was not true, and if it was accurately published, then the IRS/FBI should be paying him a visit right now. These guys are all the same, from Countrywide's Mozilo to Lehman's Fuld to Goldman's Paulson. They earned their nicknames Bully and Gorilla for good reason. I think the public now recognizes how HB&B is run, and by the type of person. I'm glad to have retired from all that in 2000.

btw, if you are watching the Fuld testimony, look at the lips of the three people sitting behind him. Those are faces of emotionally beaten people.]

I am watching this too music man... hard to believe some of his answers

This is a very slow descent back to the intraday lows... Looking rather scary because we just hit 1 PM.

The really nauseating thing is how the politicians (who obviously know very little about the financial system and derivatives market) keep asking Fuld for advice about how to improve the stability of financial institutions.

Kind of like asking the fox with blood and feathers in his mouth how to build a better henhouse!

Racing heartbeat and pulled the trigger on some SLW at 5.85 this morning. Looking really close at GFI now. XOM, KO and HBC as Bill has recommended are a little to rich for Wachovia based wallet (ouch, I hope I'm not in too much trouble in not bailing out my checking/savings from WB).

A great deal of gratitude to Bill and everyone else here (especially Kaimu for his over-the-top insights).. I'm long in all things and I know nothing about puts, calls, options and stink bids, but even so I've learned more in the last month since discovering this blog then in my entire life.
It's appreciated. We live in interesting times indeed.
bill (in washington, dc)

Re: Fuld's half bil in pay:

The MikeNYC Industry Overpayment Rule:

If the members of any given industry, besides rock stars, are getting (p)(l)aid like rock stars, a thorough investigation is mandatory.

Both the (p) and the (l) were true here in NYC for the past five years. That just ain't right.

Fatty Arbuckle,
"For the Cramer Contrarians among us, he says it's time to get out of stocks:"
Does Cramer get paid for this, or does he just get his jollies being on camera?

This noon Fuld is testifying before the House Oversight Committee (Hindsight Committee?)
His opening line was, "No one could have foreseen the effects of the mortgage policies on the credit markets...blah, blah..."
Hey, that's what they paid you big bucks for — and I don't for a minute you were clueless.
Like Sec. of State Rice right after 9/11, "No one could have expected an airplane to be used as a weapon."
Whoa! Read a bit of WW2 history or watch the History Channel. (Think Kamikaze.)

This noon Fuld is testifying before the House Oversight Committee (Hindsight Committee?)
His opening line was, "No one could have foreseen the effects of the mortgage policies on the credit markets...blah, blah..."
Hey, that's what they paid you big bucks for — and I don't for a minute you were clueless.
Like Sec. of State Rice right after 9/11, "No one could have expected an airplane to be used as a weapon."
Whoa! Read a bit of WW2 history or watch the History Channel. (Think Kamikaze.)

Re: Fuld
Where is Dexter when you need him

Well, its not mortages per se, its the sum total of oil derivatives speculation, unlimited credit, AND mortgages.

FranSix,

The Yen carry trade was the quiet backstop to the oil derivitives, unlimited credit, and mortgages you mention. .8% financing is a drug stronger than meth.

As the Yen strengthens and "Taps" is played for the Yen carry trade, I think more selling will continue, and the market will suffer withdrawals from the carry trade drug of easy, almost-free, money.

Music city man and Bill,

Fuld began his testimony before the House Hinsight Committee with, "No one could have foreseen the mortgages affecting the credit markets..."

Remember Sec. Rice saying, "No one could have expected a plane to be used as a weapon."

Hey, folks, that's what you got paid the big bucks to foresee and prevent (along with the committee). Check the history of fraud and look up Kamikaze.

Sorry for the repeat on Fuld — kept getting message the post didn't go.

re: Currency question
FranSix or SiO2 (or other Canadian investors),

The $US is looking quite strong right now. Is it prudent to buy American stocks right now if one is a Canadian investor? With the $700 billion + bailout, do you expect the $US/$CDN ratio to decrease after the immediate crisis is over?

The reason I am asking is that I was invested in some US-listed ETFs when the Canadian dollar was strengthening. What appeared to be decent gains were illusory.

Mikey,

Damn few are the rock stars who made
Fult-type money.

That was great hearing Bill's voice on the interview. For a little excitement I decided to update the BIOS on my computer. It worked. Intel makes good stuff. My paints almost dry, so back to work I go.

Good morning! I see that my latest gamble of buying stocks on Friday did not work out and I will get a margin call today. I decided to act early and sold my 400 shares of TBT (with an average cost basis of $63.5) at $56.50, which is the smallest percentage loss out of all my positions. Remembering the lesson of 2nd_ave to find positive aspects in any market moves, I am very happy about my recent TBT position, as it kept a good chunk of my money in a "safe" location away from the more volatile miners, etc. Also, using 2nd_ave's terminology, I decided to make a "lateral move" into SLW and bought $500 shares at $6.41, after seing that SLV was up but SLW was down 10%. If things turn around here, then I'll make more money on the 500 SLW shares (absolute investment of $3200) than on 400 TBT shares (absolute investment of $22500). I think this would be good "lateral move" to do at this point even if I didn't have to protect myself from a margin call.

Re: Currency Risk

I would say currency risk is easier to evaluate domestically. But you'll have to find a growth story.

I also want to add that I am proud to live during such unique times! I finally feel like I am one with the rest of the world, as opposed to being an outcast gambling on commodity stocks. Losing some money is the "least expensive" way to get such an experience -- being together with the other Holocaust victims was much more painful, to say the least. So all those who are despairing today should instead thank God that all the problems now are on some abstract monetary level as opposed to the real physical level as was during WWII.

CDNUSD=X
Sell into strength. Buy into weakness.

im speechless at whats happening to the gold miners right now. new lows for the day.

are they really just stocks as far as the market is concerned when selling happens?

do we need a new bull before they can rise, or is there a decoupling puke point when they just go too low relative to the underlying asset?

Buying a few things:

RBY @ $1.18
NVDA @ $7.65
DE @ $35.22

On Bill Cara's take: SLW @ $6.27
(plus calls MAR 12.50@ $.60)

At this point, I don't really know where market is heading. There is selloff, but volume is not covincing. In fact, in the last week the volume was not convincing that the market paniced in any day. But these volumes added up quite a bit.

I am not experienced enough to tell if the market still need a 10% (or more) down day with huge volume that will mark the turning point. What is everyone's take on this?

Should be CADUSD=X.

Same thing happened with holding GLD and then converting back to CAD. The 20% gain was actually flat in CAD terms.

Unless you have some good models for currency arbitrage it would be easier and less risky just to focus on Canadian stocks. (If I'd have listened to this advice I would not be holding GE like a 1 ton anchor)

There's lots to pick from now that markets outside of US are being avoided like the plague.

Why not some PCA.TO? OIL.TO? XIU.TO?

TSX Advancing - 98, Declining - 1458

Almost 40% made new lows today. Is the bottom in when they all make new lows?

I'm not expert, but I don't recall a slow bleed such as this one in my