Good morning.

One Cara 100 Ratings Change to report at this time:

IBM - Downgraded to Equal Weight @ Barclays

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

Have a great day.

Bill,
Ahhh, memories are made of this...
Harry Stonecipher: (aka, Fuzzy Rock-Nothing)
After laying off 30% of the workers at our formerly largest local employer (the week before Christmas) he moved on to McDonnell-Douglas where he sucked that one dry and then made it his ticket the Boeing job. Because he had a fondness for Chicago he then moved their HQ from Seattle to Chi-town.
That personal trifecta managed to decimate financial contributions to the charities of three cities. I'm sure he is remembered by many each time they run short of conventional swear words.
It is this same whatever-it-takes-to advance-ME attitude which I watched develop over about 15 to 20 years which culminated in the current global economic mess. Prior to that (at least here) first generation immigrants devoted their talents creating businesses beneficial to as many people as possible and their new country out of gratitude.

JWibbs- wondering if your buy signal was triggered yesterday?

Bill: I want to compliment and thank you for your excellent WIR. I see few comments in the discourse related to this excellent source of information. It is my “must read”, I have spent 35 years scouring the countryside for investment information, I find the WIR to contain the most informative and actionable information of any source I have found.

Excellent work, many thanks,
Jim

Steve Saville has an excellent article on Inflation and Money Supply.

http://www.safehaven.com/article-11485.htm

Trend Change Signaled

In our 3rd October email alert we wrote: "The Fed expanded its balance sheet by $254B during the one-week period ending 1st October, which follows a $204B expansion during the preceding week. As a result, the Fed's balance sheet has grown by almost 50% within the space of just two weeks. This, we believe, is unprecedented."

Last week's money creation by the Fed won't appear in broader money-supply data until the end of this week, but the week-before-last's expansion of the Fed's balance sheet has given the True Money Supply (TMS), our preferred monetary aggregate, a substantial boost. In fact, it has pushed the year-over-year (YOY) TMS growth rate from 3.75% to 7.0%, thus signaling a new major upward trend.

We can never know for certain, in advance, which items and which markets will be the eventual main beneficiaries of an upward trend in money-supply growth, but we can make educated guesses. In general, inflation will exert the most upward pressure on the prices of items/investments that are relatively scarce and relatively under-valued.

Value is always a matter of opinion and there are many smart people in the world who disagree with our assessment of relative value, but from our vantage point the broad stock market's high P/E ratio and low dividend yield disqualify it as a likely big winner from the coming inflation. The bond market also looks over-valued, as does the property market. Commodities are likely winners because in most cases their prices remain low in real terms and because the large nominal price gains of the past several years have not yet brought about large increases in supply, but industrial commodities such as oil and the base metals could languish for quite a while in response to the global growth slowdown. Gold, however, often benefits from illiquid financial markets and economic weakness due to its historical role as money. Furthermore, we think gold is cheap relative to most other commodities and most other investments.

It could be 1-2 years before the new upward trend in money-supply growth begins to have a meaningful effect on commodities in general and 3-4 years before it begins to boost the prices of everyday items, but gold's reaction is likely to occur much sooner due to the anticipatory gold-buying of large speculators (some large speculators will appreciate the inevitable/eventual effects of the monetary inflation and take positions in gold in anticipation of these effects).

Cara 100 Update:

Kaufman Bros. Upgrades the Cara video game stocks:

ERTS & ATVI Upgraded to Buy.

Target Price Lowered:

GOOG - from $600 to $525 @ Stifel Nicolaus
PBR - from $107 to $76 @ Credit Suisse

If BA falls out of reach, there's always BBD-B

http://tinyurl.com/3remcb

The RSI has been flat for a good week now. Looks poised to bounce, though it hasn't hit 2 year lows yet and has been almost shaved in half since the beginning of Sept. I think it was considered a "dog" on BNN.

Congrats on BNN mention, Bill. Maybe they'll start doing segments from the beach.

Canada needs a tropical island. Lots of opportunities for another province... less passport hassles.

http://tinyurl.com/43exkg

When are we going to start seeing takeovers of these falling exchanges by governments?

I remember reading a story about vacationing bank execs from Canada in the Carribean setting up shop there.

http://www.royalbank.com/caribbean/

As there were less losing stocks in the US Cara 100 yesterday, would it suggest a bigger payback in Canadian equities?

"The Bank of Canada said on Tuesday it will not participate in coordinated central bank actions aimed at increasing U.S. dollar liquidity."

http://tinyurl.com/3wv49a

Some more details on BA stock transactions.

http://www.mffais.com/ba.html

Bill,
Good Morning from a cold Oakville!
Thank you for sharing your thought process on the Boeing purchase with the puts.

Djuspm and the hui have hit long term supports. I could never convince myself that they would get hit at 850 gold even though I have had these 2 charts drawn for months. Guess that is why I am such a poor trader.

$djuspm has a reliable and interesting pattern
http://tinyurl.com/3t3k9p

Hui fan line off the 35.31 low has now been touched for the 3rd time.
http://tinyurl.com/5gajzt

Dollar and Gold Rise Simultaneously? Bring On the Flying Pigs --- Tim Iacono is amazed at something Bill had predicted weeks back. http://tinyurl.com/4ttwsv

Rational thinking please ---Is there a connection or will there be a connection between prices of PM and jr miners?

Mmmmmmhhhh...Are we going to start seeing the "Cara Effect" in stocks??? If BA pops today I guess we'll have to wait a week to buy back in.

I'm sure most could care less, but:

The paid subscription site at "the street" has had many daily conflicting headlines, usually posted by Cramer and RevShark. RevShark finally moved into the buy camp yesterday after refusing to have any part of it in the preceding months.

This morning Rev talks of the market moving toward a meaningful low, while Cramer proclaims that the selling is not done, and that yesterday's bounce was short covering on rumours of rate cuts.

The futures have picked up in the last few minutes.

Kaimu - Thank you for your 10/4 10:42pm reply post. I agree with your inflation posit. I believe the issue is one of lag-time, as mentioned in this article (Most likely from this blog.) http://tinyurl.com/3kduqt

"A pronounced and sustained increase in the rate of money-supply growth ALWAYS leads to substantially higher prices somewhere in the economy, but due to the time-lags involved it will often be difficult to see the link between money-supply changes and price changes. For example, the rapid rises in the prices of many everyday items over the past three years occurred while the money supply was growing slowly. These price rises were an effect of the rapid money-supply growth that occurred during the first few years of the decade. Also, the quickening in the rate of money-supply growth that has just begun and looks set to continue over the coming year will probably be accompanied by a slowing rate of increase in the general price level, thus setting the scene for a "deflation scare". The reason is that the prices of everyday items have yet to react to the slower money-supply growth of 2005-2007."

Lotta folks looking at FCX,IPI,CF,MOS on max pain options. JMO, no bottom in those...yet

I would give some weight to RevShark's opinion...

BA - All in - Thanks Bill

Canadians getting hit. If you thought Canadian's banks were immune, think no more.
TD Canada Trust is hiking variable rate mortgages and credit-line rates from prime to prime +1%, a move that is expected to be followed by all banks. This has significant repercussions.

http://money.canoe.ca/News/Sectors/BanksFinance/2008/10/06/6998666-cp.html

BA: Seattle news story last night on CEO asking union to come back to work.

You will all remember all the negative stories to drive the price down as employee pay increases are tied to stock price....and we don't want the striking employees to be able to sell their stock for profits during a strike....right?

This is a $100 company in a $50 Men's Wearhouse price.

I keep an eye on local Boeing news.
It's sure to get a healthy pop when the machinists come back.

SiO2 - wow, that is quite a story.

If it does spread to other banks I'll be happier with my recent decision to lock in to a 5 year fixed at 5.25%.

2nd
Will wait and watch. No money left to do anything
Will not use margin. I think bottom was hit yesterday. Also feel that coming earning has been discounted
Good time to learn what other is doing and what happens to their action and trading

Cara 100 Update:

WHR - Downgraded to Neutral @ Longbow

Cox's SEC Censored Paper Showing It Ignored Bear Stearns Plunge

By Mark Pittman, Elliot Blair Smith and Jesse Westbrook
Enlarge Image/Details

Oct. 7 (Bloomberg) -- U.S. Securities and Exchange Commission Chairman Christopher Cox's regulators stood by as shrinking capital ratios and growing subprime holdings led to the collapse of Bear Stearns Cos., according to an unedited version of a study by the agency's inspector general.

The report by Inspector General H. David Kotz was requested by Senator Charles Grassley to examine the role of regulators prior to the firm's collapse in March. Before it was released to the public on Sept. 26, Kotz deleted 136 references, many detailing SEC memos, meetings or comments, at the request of the agency's Division of Trading and Markets that oversees investment banks.

``People can judge for themselves, but it sure looks like the SEC didn't want the public to know about the red flags it apparently ignored in allowing Bear Stearns and other investment banks to engage in excessively risky behavior,'' Grassley said in an e-mailed statement.

An unedited version of the 137-page study posted to the Iowa Republican's Web site Sept. 26 showed that Bear Stearns traders used pricing models for mortgage securities that ``rarely mentioned'' default risk.

The firm lost one of its top modelers ``precisely when the subprime crisis was beginning to hit'' and writedowns were being taken, the full report said. ``As a result, mortgage modeling by risk managers floundered for many months,'' according to the unedited document, quoting internal SEC memos from April and December 2007. The comments were removed from the edited version publicly released by the SEC.

Trading and Markets had oversight of holding companies for the five biggest U.S. investment banks via the Consolidated Supervised Entity Program. The division failed to follow up on ``red flags'' raised by New York-based Bear Stearns's increasingly ``significant concentration of market risk'' from mortgage securities, according to the full document.

`Failed' Mission

The SEC, which governed the firm along with the Financial Industry Regulatory Authority, ``failed to carry out its mission in the oversight of Bear Stearns,'' the agency said in both versions of the report. The Federal Reserve will provide $29 billion in financing for JPMorgan Chase & Co.'s March 14 takeover of the investment bank after the government said it stepped in to prevent panic.

The agency censored the report because ``the requests from the Division of Trading and Markets covered non-public information,'' said SEC spokesman John Nester. The information ``was contained in non-public memoranda and documents.''

JPMorgan spokesman Brian Marchiony declined to comment.

A footnote in the uncensored version of the report quotes Bear Stearns Chief Executive Alan Schwartz as saying he hadn't held ``terribly current discussions'' to raise capital for his firm even after the SEC asked in March, two weeks before it failed, about obtaining funds.

No Help

While Bear had retained Lazard Ltd. as an adviser, the report quoted Schwartz saying, ```The time it would take to get that done, it wouldn't help.''' The CEO said rumors would cause more damage in the meantime, according to the SEC.

Schwartz didn't return a phone call for comment.

The SEC took no action even as Bear Stearns provided more collateral to lenders as they lost trust in the 85-year-old firm, the unedited report said.

Ratio Drop

The agency removed a section of the publicly distributed report showing that the Division of Trading and Markets knew Bear Stearns's capital ratio had dropped to 11.5 percent in March from as high as 21.4 percent in April 2006. The ratio measures assets, adjusted for risk, relative to a firm's equity. Ten percent is the minimum standard under international banking regulations.

Regulators from the unit ``inquired whether Bear Stearns was contemplating capital infusions,'' even though they didn't formally or informally pressure the firm to do so, according to the unedited version.

Under the voluntary Consolidated Supervised Entity Program, the SEC couldn't force the firm to raise capital.

The CSE ``was fundamentally flawed from the beginning, because investment banks could opt in or out of supervision voluntarily,'' Cox said on Sept. 26 in announcing the program's shutdown.

``This chain of events raises very significant questions about the supervision of all types of financial institutions, not just investment banks,'' said a written response to the inspector general's report from the Trading and Markets unit, headed by former agency chief economist Erik Sirri.

``With respect to Bear Stearns, the staff applied the relevant international standards for holding-company capital adequacy in a conservative manner,'' the unit said.

`Run on the Bank'

The staff ``added a holding-company liquidity requirement; and yet, they couldn't withstand a `run on the bank,''' the response said.

Kotz, the inspector general, declined to comment, as did Cox.

Bear Stearns was able to ``create capital'' by inflating the value of assets including mortgages, according to the unedited study. Two days before it was rescued, the firm paid out $1.1 billion to ``numerous counterparties to squelch rumors'' it couldn't meet its margin calls, the full report said. The finding didn't appear in the censored version.

`Generous Marks'

The firm ``tended to use the traders' more generous marks for profit and loss purposes,'' it said.

Trading and Markets unit members saw that Bear Stearns traders dominated less-experienced risk managers, the inspector general reported in sections that were excised from the public report.

``As trading performance remained strong for years in a row, it clearly wasn't career-enhancing to stand in the way of increasingly powerful trading units demanding more balance sheet and touting their state of the art risk-management models,'' said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York, and a former chief financial officer at Lehman Brothers Holdings Inc.

The Basel Committee on Supervision published revised guidelines in 2004 that allowed global financial institutions to ``rely on their own internal estimates of risk components'' to help determine the amount of capital they needed.

By censoring the report, ``the SEC didn't do well by the public and the inspector general didn't do well by the public,'' said Tom Cardamone, managing director of the Washington-based Global Financial Integrity Program. ``The buck has to stop someplace. Joe Main Street has to rely on the professionalism of the people doing the job.''

For Related News:

To contact the reporter on this story: Mark Pittman in New York at mpittman@bloomberg.net or; Elliot Blair Smith in New York at esmith29@bloomberg.net or; Jesse Westbrook in Washington at jwestbrook1@bloomberg.net.
Last Updated: October 7, 2008 00:00 EDT

What up wiht GOOG down again ?

Took a position in BA

Since reaching my target on ESZ8 of 1000 I've accumulated over 25 Cara 100 stocks. My portfolio is very green. Thanks for all the encouragement Bill. It really helped me be brave enough to go in when things looked like hell. I've also bought my "insurance" in gold, but my % is a little higher than yours at this point. good luck to everyone with their trading.

Hey Guys!

2nd I'm sorry I haven't been keeping up with all the posts properly...My opinion in what regard?

Vad it looks like buying yesterday (am possibly selling right now) was the ace move, I owe you a Patsy's Pizza when you come to NYC.

and, not am.

GOOG down 14 now!

I knew the GOOG would oneday turn into a monster short when eveyone realized a simple truth....

Sergei Brin has no clothes....Oh wait, that's me trading naked I forgot.

So much for the rally.

Dow going down. NASD in the red.

I don't know....XLF reversed, GS down....not a good sign.

i was a hair away from getting stopped out of my entire gold miners position on the HGU today at $10.

phew.

they still seem tied in lockstep w/ the broader market.

Not disagreeing with anyone but simply commenting that TODAY is really the classic example of the amateurs opening the market.

and by that you mean the jump at the open followed by a downward grind then rally late in the day?

Good morning.

I am enjoying the community. I appreciate all your comments.

I have two questions. Any suggestions for long term healthcare plays? Also, the term "materials" references what exactly?

Thank you.
Yaya

hulbert: was monday capitulation? no...

http://tinyurl.com/47zhlm

"So the fact that Monday felt like capitulation tells us little about whether it indeed will mark the final low of the bear market.
To determine whether it will, therefore, we have to go beyond our subjective feelings and focus instead on the hard data: Did sentiment really and truly drop far enough on Monday to constitute genuine capitulation?
From where I sit as monitor of several hundred newsletters, I'm afraid my answer is "no." Believe it or not, the editor of the average short-term market-timing newsletter actually reduced his bearishness Monday."

Agree on Rev Shark. He hasn't so much as nibbled at anything for months, almost daring people to stay in cash.

I remember vaguely (i could be wrong here, somebody else needs go confirm) but the July lows were also accompanied with people saying "everybody's looking for capitulation, so this isn't it"

good for a bounce. flip the charts of the major indices, and they look like ripe shorts after yesterday.

that should be "needs *to* confirm"

yaya:

I usually see "materials" used here in the context of Basic Materials, which generally encompass Chemicals, Rubber, Plastics, Wood, Steel, Non-metallic mining, Paper, etc.

What/who the heck is rev shark? Never heard of him:)

My reasoning against a bottom or at least a rise: The black hole of leveraged hedge funds. How much more is out there? How many will get their credit yanked? How many shares will they have to liquidate for margin calls, which will then lead to redemption. We know this has been happening for a while.

SHarkster: He's a columnist/day trader on Cramer's site.

Re: Rev Shark

Wow I see. I am going to have to invent a whole new persona didn't know there was another shark out there. Oddly enough we are both deaf. In my case it's from spending abou 10 years standing in front of a Marshall couble stack playing bad guitar singing dirges about lost love.

I need a new animal. Where's Chickenpookie?

shark- Rev (James de Porre) has a pretty interesting background...he was either admitted to/enrolled in the Michigan Law School when he started to go deaf-> dropped out, started trading, got good at it, developed a following, recently married and now lives in the Florida Keys...

Right, amatuers buy 500 blocks of futures and sell billions in bonds.

And you're a pro I assume?

"Not disagreeing with anyone but simply commenting that TODAY is really the classic example of the amateurs opening the market.

Posted by: shark_attack October 7, 2008 10:01 AM

These past couple of weeks and especially the past couple of days I have been in awe of the sheer power of the market.

It's incredible to witness and almost equally amazing to see these smaller exchanges around the world collapsing becasue they definitely seemed to be funded with mainly American Speculation money or carry trade speculation money.

In times ike this you really find out who the more stable exchanges are when the money starts flowing home.

Rob.

Nah, you just need a promotion.

You are hereby to be known as Cardinal Shark.

i prefer Card Shark...;)

Senor Procol,

I was listening to Bloomberg at 5 am and I knew the rise in Dow futures was B.S.

What I said or meant to say is that "everyone"
who bought long between the open and say, 9:50 am was, at least in their behavior, amateurish.

I myself am an amateur.. A full timer, profitable, but an amateur. But at least I didn't go long, so maybe I'm not that much of an amateur.

Sharkie,

I too have logged my time in front of a Marshall JCM 900 and have the on-again / off-again tinnitus to prove it.

Blowout Preventer

Thank You.

Rob,
I am in awe at how manipulative the market is and how obvious the collusion between major players. Random walk my ass.

until the SPY can move above the opening price on good volume there is no rally.

FYI: Costco is the place for hearing aids according to my friends with large sound systems.
I try to *not* move my house (or internal organs)with 32 cycle waves anymore.

got long some rbs

BA CEO releases a statement urginf the striking employees to resume work.

The darn market's falling again and I am flat

Capitulation--as known to every one
May not work same way as before
Situation may not be same all the time?
This time there is no fear and panic

this market's schitzoid.

vinod- i didn't post Hulbert's survey to necessarily indicate we're not at a ST bottom (although that may be the case), but to let you know what's out there...his findings usually play out over a 1-3 month period-> one scenario may be we spike down again soon to get capitulation, another may be we rally to 12000 only to sell off to 9000...

..and once in awhile, Hulbert's just wrong..

Card Shark works fine for me 2nd.

I was going to promote him all the way to Pope, but that was taking the chance he might foul the pool at the Caraista party. You know, Pope Sharks don't use the woods....

And now I think we go sideways until the FOMC decision at 2PM

theres a rate cut decision at 2PM or just a formal annoucement of today's purchase agreements??

2nd
My feeling is if we do not go down soon, than seasonal factor kicks in, also election is getting closer. They will do everything for republican to win, lots of seat in senate and congress is in trouble.

Living in Canada we have not had the severe downturn in real estate like the United States

Being a property owner myself in Canada and feeling for you hard working Americans that have saved all your lives to buy a home and to see real estate values come down like they have is heartbreaking....

With the way the world is right now anything is possible anywhere....even in Canada

Can anyone in the cara community living in the United States make us understand maybe by personal experience what has happened to their personal property in terms of past evaluations and current evaluations (don't have to use real numbers)and how long does it take to sell your home today if it was up for sale???
How hard is it right now to get a mortgage for a home??

thanks
SV

Well, if that just doesn't beat all. An inversion of the yield curve is happening in the Eurozone in the midst of a credit seize-up:

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

I don't want to be Pope Shark.

Call me Reverend Irreverent.

Good jobs at good wages.
http://www.treas.gov/press/releases/hp1185.htm

October 6, 2008
hp-1185

Treasury Announces Solicitations for Financial Agents under the Emergency Economic Stabilization Act

Washington, DC--The Treasury Department posted today three solicitations for financial agents to provide services that are needed for the effective implementation of the Troubled Asset Relief Program authorized under the Emergency Economic Stabilization Act. The three services being sought are:

Custodian, Accounting, Auction Management, and Other Infrastructure Services
Securities Asset Management Services
Whole Loan Asset Management Services

All interested and eligible parties that meet the requirements and guidelines required of each service should submit requests by the 5 p.m. (EDT) on Oct. 8, 2008. Treasury expects to announce the results of initial selections from these three competitions next week. In some cases more than one financial agent may be chosen.

These services are being obtained through the Treasury's authority to retain financial agents to provide services on its behalf as provided for under the Emergency Economic Stabilization Act. These are not contracts governed by the provisions of the Federal Acquisition Regulation. More information on Treasury's procurement authorities under this Act can be found at: http://www.treasury.gov/press/releases/hp1179.htm.

Dr. C

Sorry to mislead, FOMC today is just the minutes, I think the next rate cutting meeting is on Oct 28 or 29. Although never know what they might do, volatile times here.

Any ideas why SU is down 5% when oil futures are up 2.5%, and after SU has been down 25%+ in the past few days?

Okay Rev. Irrev. but you miss out on the funny hat!

Chickenpookie come back! There's a empty space in Bill's blog without you.

fazeli,

the same reason gold stocks are down huge while gold is approaching $900.

RE: shark_attack... new idenity

For your consideration... given current conditions (valuations)... "attack_shark" might be completely appropriate very shortly.

Long time reader... currently sunk with my longs... not much to do but stare out at my great view and pray for the good ole days... lol

no, it sounds too much like reverend irrelevant, especially after a few drinks...

One of my mining stocks is up over 75% today. Now if it would just go up the other 195% I'd be back to break even!!

This selloff is on low volume; much lower than the buying in the last two hours yesterday.

$VIX is down; $IRX is up; you would think we would rally. Maybe later.

SV:
Mom is now in assisted living. Home (So. Cal.)was was approx. $600,000 in 2005. Just got comps from three realtors, now in $380,000 - $450,000 range depending on how quickly I need to sell.

There are some buyers and one interested that just got pre-approved for a loan.
I'm going to do it without a realtor if possible, have a friend in the escrow biz who has it lined up.

That should give you one person's view.

BOT (NCC) @ 2.51......I'm going w/ the pass line today for all you craps fans, come on 7/11.

``Libor is the problem and it has been the problem all along,'' said John Roberts, managing director at Barclays Capital Inc., New York. ``If they fix that, they are on their way to fixing a lot of things.''

my question is how can they unfreeze markets where loans aren't secured by assets

This negative feedback loop of no confidence seems to be the proverbial death spiral. I have been a long time lurker and love the commentary and am generally optimistic. But, I just dont see how this log jam gets resolved and the certainly dont see how the market recovers until it does. I know there are some bulls now on this board Bill being one. I am on the low side of the brain gene pool here but anyone who can guide me through how and if they think this will work.

Capitulation list

UHS, XTEX, CRL, EXH, CPRT, CGX, SCHN, TEX

most are trading below RSI 10 on 7 day.

put in some orders - no positions at this time.

do ur own homework.

Thanks Craig

SV

IB increasing margin

Oct 06, 2008
MARGIN INCREASE TO BE IMPLEMENTED
In the interest of ensuring the continued safety of IB clients, IB is modifying certain margin policies to adjust for the unprecedented volatility in financial markets. The changes as outlined below are intended to promote a reduction of leverage in client portfolios and help ensure that clients' accounts are appropriately capitalized.

Stock Margin Increase (7-8 October 2008)
The minimum margin requirement for stocks held in regular (non-Portfolio Margin) accounts will increase from 25% to 30%. This will affect all stocks offered by IB globally: US, Canada, Mexico, Germany, UK, Switzerland, Sweden, Spain, France, Netherlands, Belgium, Hong Kong, Australia.

Currency Margin Increase (7 October 2008)
The minimum margin requirement for currency positions will increase from 2% to 2.5%. This will have greatest affect on cash/spot foreign currency positions in USD, EUR, AUD, GBP, CAD, CHF. It will also affect portfolios with other asset classes denominated in these currencies as well. For example, if your base currency is USD, and you hold 100,000 EUR worth of EUR denominated stock, the margin requirement relating to the currency component of the portfolio will increase from 2000 EUR to 2500 EUR in addition to any margin requirement for the stock risk itself. This change is expected to go into effect at 16:30 EST on Tuesday, 7 October 2008.

Fazeli,

A less glib answer is that when crude is dropping like it is, it makes alternate energy stocks including solar and oil sand less attractive.

Rate move predictions and market effect please...

My DENSA $.02

Dropping the interest rate does what? Allows banks to make more money, I guess? Does it get them to loan or trust each other? I don't think so? Market goes down.

Keep them the same, market sees it as FED fecklessness, market goes down.

Interesting to see the market going down again, on the news Fed is going to buy commercial papers, and that Australian cut rate by 1%.

It's either someone knows something we don't, or someone wants the discount shopping spree continue today.

BBD-B down around 2.3%
BA down around 2%.

Awaiting 11:30-11:45 buy programs to kick in.

There we go.

Still unclosed gaps above most everything.
Market looks weak today, but the bulls are going to try to close those gaps, probably later today.
This is no-mans land, no place to initiate new positions, short or long.

Strongest today is XLE, made it back above the major fib @ 55.40, but has not closed the gap.

Weakest is IYR (also XLF - no position).
IYR has a major fib @ 49 which I was looking for it to hit, but it bounced off the round number 50 yesterday instead.
note to self - watch those round numbers also, not just the fibs.
Think it will hit 49 today instead, eventually continue on down.

XLY has next target 20.

SLW faking out around it's intraday downtrend channel.

Only gold is bullish - new high for the year in SEK.

bsi87,

Thanks for the clarification. I'm surprised to see SU continue downwards though. There's been enough of a spike in crude and down slide for SU that it should garner some buying interest!!!

I may be entirely wrong, but it looks to me like the market was falling as traders look to see if mom & pop have anything left to sell. That is why it is just a drift lower. Volume seems to indicate that they are done panicking.

One worry seems to be the British banks asking for yet another bailout.

SV, there are several 'bubble' areas in the US - FL, CA, big cities and beach areas. But most of the middle part of the country didn't have a huge runup. I recently sold a house in northern PA for $225k. It was listed for 3 weeks before we got 2 offers. It was priced appropriately and wasn't in one of the bubble areas. I know of beach houses at the NJ shore that would have fetched $2.5m a couple years ago and now can't sell for $2.0m.

The market is down a bit this morning, but looking at charts of the major indices it looks like they are just retracing a bit of yesterday's move and trying to resume the uptrend that began yesterday afternoon.

A lot of players are up against the ropes and being forced to make difficult decisions as to their appetite for risk........its logical that this ship isn't going to do a complete 180 and make that decision for them.

In any case, from a long perspective, I like the action am seeing this morning but am expecting the ship to travel through more choppy waters that will leave the legitimacy of a turnaround in question.

Regarding a FED rate cut, I think the best move for them is to sit tight while foreign central banks fall in to line by offering rate cuts of their own.........I don't think a FED rate cut would be efficient use of a dwindling supply of ammo at this point.

bear market is lack of interest - lack of buyers, low volume dribble down.

The high volume volatile washout days are the exception, may come at turning points, but may also come at re-acceleration points.

SU just seems to be testing the bottom. You have to go back to 2005 to buy it at this level.

Also considering

Badds Bunny
Rudy Barracudy
Louis the Lip
Joey Juice
Vinnie Vig
Sigfroid the Hemmerhoid
and my favorite....

The Freaking Doctor.

re:ECA,IMO,SU

RSI 7 day are 16-20 for all 3. So if one follows the Triple RSI buy system, one has to wait for them to break above 30.

Or wait for capitulation.

No position in them.

Thanks Ksobo2000

SV

look at GGP yield 47%

HB&B -> Your money or your life!!! Well, now it's Europes turn, huh??? Surplies, surplies!!! Rinse and repeat...(as someone here so clearly summarized). It's important I think, for us to keep letting government know we're not going to allow special interests to hold us for ransom any longer... This is our opportunity for escape from this crossbars motel.

Well, I've been lurking on the sidelines, waiting for the market to make up it's mind (yes, still have all my longs and the last few days were painful; not because of losses necessarily, but because of opportunity costs ouch!). Got the urge for a new computer last week and picked up a decent box running Vista but couldn't get past Typekey... Back to old machine for a moment to let you guys know CP is still alive and kicking with full intention.

shark - No name changes please, unless you're willing to hear complaint.... (ill advised). Besides, Typekey might kick you out of the pool too.

I'm betting we close flat...

Perhaps we discounted Henry Waxman too much during the Spitzer debacle? Or perhaps overweighted Spitzer?

Anyway, for our continued entertainment it seems Waxman's back in top form.

Hi there, my largest position short CTX, LEN are still levitating (both from 15). I've been playing these short for 1 year which has mitigated all my energy losses, but I think the game will be up soon (probably close out around $11). What has helped me is fundamentally having a belief in what they are worth, and willing to stand through them and go back to the trough over and over. I wish I'd purchased more leaps put options on these homies.

Any macro ideas on what the next "go-to" downside picks might be? Anything where a business is clearly mispriced/overpriced.

Bill's Book:

In case there is anyone out there who hasn't read "Lessons from the Trader Wizard," I highly recommend it. Easy to follow and lots in it for even those who may never really get into shorter term trades.

In the first couple chapters I recognized a lot of the good, bad and the ugly choices I have made in over forty years of investing. Wish I had been able to learn many of these uncomplicated bits of wizard-dom at an early age, but better late than...

Cramer, though not mentioned by name, came to mind a couple of times so far. (And many others from TV and pop investing pubs.) IMO, Cramer was better in the earlier TV series with Seinfeld, but he's still a very funny guy! Especially lately.

This may seem a strange comment for a financial book, but I'm honestly enjoying it.

It's amazing the pc you can buy these days for 3-4 hundred. I must say as a former owner the IMAC doesn't compete price wise though it's a superb machine, which finally gave up the ghost after I surfed it into oblivion.

What did you get a Compaq?

Sharky, how about lamprey???

navid - i think you might be better served looking for the next go to upside picks, what with the market down some 35% from it's peak. There are some clearly overleveraged companies like GGP that will go down, but I think the upside potential for companies like IBKR, BA, NOK, STT, BIDU, etc are greater than any potential downside plays. And given your propensity to hold through swings in the market, as evidenced by your short position on home builders over the very volatile past year, a long term holding position (1 to 3 years) of the above companies would probably do quite well.

GGP: In mid-suicide swan dive......

There is nothing below this one Vinod, drag up 10 year chart and behold the carnage.
I bet that div is history.

Might bear watching for some kind of bottom though...unless it goes to zero.

anybody nibbling on AUY down here....they've got a pretty strong pipeline of projects coming onstream in the next year and valuation is looking compelling if they make the .95 '09 estimate.

Vinod:

Reggie Middleton did an extensive analysis of GGP at the BoomBustBlog. Dead Reit Walking.

Re: Interest Rate Cuts

If any central banks commit to hefty interest rate cuts, especially the JCB, then this would lead to stability in the $US and some continuation of the carry trade at the expense of any recovery down the road.

I think it would come as much of a surprise to foreign exchange observers as the Aussie rate cut, which is probably at the heart of massive adjustments in currency regimes yesterday, along with everything else washing out markets globally.

The JCB has room to maneouvre, but not as much as the Euro central bank, or even the BCB. Brazilian rates recently saw a decline, and they are on the cutting regime especially in light of their recent stock market crash, so I would say the best bet right now would be the ¥/Real rather than the ¥/€.

I got GGP speculative name from trader here
other are LVS/DRYS. these are for some one who like to gamble

IYR first and now XLF have broken down below yesterday's lows, XLE is looking weak & testing the fib @ 55.40 for the third time today.

If the bulls can't do any better than this . . .

sv,

I live in Illinois which has higher than national admitted unemployment due to having been badly by manufacturing losses and Chicago's typical big city drag in slow economic times. My city is now officially at 10.5 unemployment, so we may, or may not, be the universal picture. In addition job quality is low with falling spendable income for over a decade.

Houses which recently went on the market are selling in my immediate neighborhood. (price range $140,000 to $250,000 currently) Those not selling are in higher price range and several have been vacant for 2 to 3 years. My guess is the owners are upside down and have already bought another at the market peak.

I have heard mortgages are available for those with good credit and a reasonably good sized down payment.

Local banks have little or no contaminated mortgages, but some regional ones are offering high interest CDs to try to raise cash.

As of July 1st, my neighbor and his wife (with national real estate franchise) told me in an average year they have sold over 30 homes. This year — one (1)! Since then sellers now have evidently readjusted their expectations of value both for selling and buying.

Vinod, maybe the plan is the div, it's due the 15th, when does/did it close?

Dry shippers pay the big divs too if the price is right. I'll bet they are hated right now.

Are these guys trading their own money?

There was mention yesterday on the subscription Realmoney.com site from one of the columnists that brokers were getting ready to send out margin calls for today -- is this current selling in anticipation?

Text:
"My Cabal
10/6/2008 3:13 PM EDT

Speaking to my cabal of retail brokers:

Margin calls are going out and should hit tomorrow

They say its an atmosphere of 1987

Position: none"

sv,

The house two doors from mine just sold within two months for about what the woman paid seven years ago.

Any sense of how the afternoon is going to go?
Long DIG, HGU.TO, UYG, TBT, AIG, AGU.to

In addition to the new Fedge fund team ramping up in the next 4 weeks, CME Group is competing with the blackwater exchanges for CDS trading.

"CME Group and Citadel will launch a joint venture for the platform within 30 days, and are offering major participants in the market equity stakes in the company to encourage them to support trading on the exchange."

http://tinyurl.com/3kakoo

Betting whatever the FED decision is market goes down.

Interesting that Mark Faber -- "Dr. Doom" -- seems to be having a recent change of heart and is leaning towards BC's point of view RE:the markets

http://tiny.cc/4WyxE

I find it interesting that even with this steady selling pressure, that VIX is down 2.86 (5.5%) to 49.16

$cdnx RSI 7 day 11.20.

From the Washington Post: "Less than a week after the federal government offered an $85 billion bailout to insurance giant AIG, the company held a week-long retreat for its executives at the luxury St. Regis Resort in Monarch Beach, Calif., running up a tab of $440,000, Rep. Henry Waxman said today at the the opening of a House committee hearing about the near-failure of the insurance giant.

Showing a photograph of the resort, Waxman said the executives spent $200,000 for rooms, $150,000 for meals and $23,000 for the spa.

i dont have access to my charting software right now, but how has the volume looked on the recent moves lower? stronger volume or lighter than yesterday?

im seeing lots of bullish divergence on RSI/W%R/STO/MACD for the GDX/HGU charts as of 1/2 hour ago

though TA may not be the most reliable way to gauge the market right now.

Thanks Grym....WOW

SV

long WX at 8.72. Came up in my Chinese ADR stock scan.

Capitulation RSI 7 Day = 4.29.

do ur own homework.

The double bottom in the XLF (17) the focus of Bull hopes?

DJIA up 20 pts 1st 30 minutes.
See how the close goes

It aint looking good. For those of you who hate me that means you should go long:)

Right now I am seeing $HUI up about 3% and GDX up less than 1%. They don't seem to be tracking together. Does anyone have any idea what is going on? Thanks.

MS down 24%.

It's the last 60 minutes that count. A decision has to be made whether to jettison the position or stay long.

At the open, there are all sorts of market, sell stops, buy stops, etc that get executed or gunned by traders.

im watching the HGU ticker like a hawk
and im noticing about 3 times today it bounced off the $10 level give or take a dime.

anyone seeing the volume on the miners?

BBD-B.to down almost 6%.

"In the industrial sector, Bombardier (BBD.B.TO) shares are down 5 percent after saying that sales of its business jets were slowing due to turmoil in the financial markets."

http://tinyurl.com/3m8lkr

"The boom in business jet sales is expected to continue for some time to come despite the global financial crisis, according to a closely watched annual forecast from Honeywell Aerospace."

"The positive prognosis is good news for Montreal-based Bombardier Inc., the world's leading manufacturer of business jets."

http://tinyurl.com/4savsw

BA down 3%.

Waiting for 2:30 buy program to kick in on BA... 11:30 one didn't work. :)

Ben says: "We have to be careful not to declare victory too soon."
There's a challenge for ya!

sv,

I live in Missouri and have a vacation home in Lake of the Ozarks, and area full of condos and vacation homes. My neighbor there told me that in the good times, the realty MLS showed 20-30 home sale closings per day. From 9/16 thru 9/20 there were 7 in the entire lake area.

I guess I'll be keeping the place!

Maybe someone could translate for me.

Kass: The Tail Might Be Wagging the Dog
by Doug Kass

The following observation is a thin-reed one and admittedly non-rigorous, but it might be more important than a lot of my fancy analysis and logic.
For what it is worth, this is what I have been seeing in the last week -- and, quite frankly, it makes me more optimistic.

As readers know, a constant theme of mine has been that the vortex (and continued supply) of selling from the hedge fund liquidations would serve as a significant headwind to any meaningful market advance.

Beginning last Monday, I began to see a number of big hedge funds in the S&P 500 futures pit, boldly selling futures to hedge their core long holdings. As the market dropped precipitously on both Friday afternoon and Monday afternoon, they got ever more aggressive -- according to my sources, more aggressive today than at almost any point in a decade or more.

If my observation is correct -- and we will get some sense of this on Friday afternoon when the size of the professionally hedged S&P futures positions are released; our thesis will be proven correct if there is a large increase in open interest -- it will be proof positive that those hedge funds are now shorting the hell out of S&P futures in order to hedge their cratering longs. Indeed, some of those hedge funds might now even be overhedged and short S&P futures, as it has been working.

This strategy is a classic tactic one sees at panic/capitulation lows as hedge-hoggers sell short what they can sell easily -- the S&P futures market is deep and liquid -- while they retain what they can't sell easily (i.e., large blocks of individual equities).

Fed Buys Commercial Paper:

I believe the Fed will be buying commercial paper only for those companies that it feels need to be saved. Example would be GE. Guess who just invested in GE and also has an investment in Goldman. Yes, Paulson just happens to be an ex-executive of Goldman. I believe there are tough times ahead and the only way to keep some companies a float is through commercial paper. Your thoughts....

MS down 40%. This market is absolutely brutal.

[Bill Cara note:

I am wondering what's up with these financials. In some cases, maybe the take-over companies were counting on the Treasury buying all the bad paper and now they are finding out that the process doesn't start for some 30 days, and may not be as friendly as they has first figured.

I think the point is that nobody knows what will happen if the entire credit default swap market comes apart here, and that if it does maybe the unwinding bankrupts all these countries. But why then would gold not be rocketing?

I'm like you; we'll all have to wait to hear a rational explanation for this latest sell-off that started after Fed chair Bernanke finished what looked to be a comforting speech.]

Thanks weekender823

SV

vinod,

DRYS has a P/E of...umm... 2?

If I was a value investor this sounds really cheap. Too bad Baltic dry index fell off a cliff. May as well park the boats someplace warm.

3B debt. 300m cash... sounds like a big gamble to me.

GKK is giving a div yield of 110%.

The question has been answered.

The Sand Shark has been vindicated. Pro traders bought yesterdays dip and sold either at the close or this morning, those who bought the close yesterday as an investment were wrong, yesterdays early sellers were right, as was anyone with the stugots to go short pretty much anytime in recognition of the fact that this market 'aint done going down yet.

In addition, all my Wall Street friends, those who still have jobs that is, are calling me and intoning mildly-to-fairly bullish sentiments, leading me to know that I am still correct. And what will the market say, I ask thee, when it realized a Barack Obama (who I will vote for since the personal attacks of this week)is about to be elected El Presidente de la nation?

Vad was definitely right particularly about one thing. A LOT of the "pros" on Wall Street are merely well educated, well connected amateurs who were never heretofore held to account for their trading abilities and who are now realizing this 'aint an easy game.

sharkie,

do you feel the same way towards gold and the like or just the general market.

Craig:

Almost choked when I heard you tell of GGP down 49%. I mistook it for GGB (I have some of that)

When I realized my mistake, I checked GGB.

MUCH better, only down 9%

Heard from someone at tickerforum that the BBC says a rescue package for British banks is to be announced soon.

i bought MS at 16.19 and am wondering if i should sell it for a 6% gain or get greedy and wait for a 50% loss...

Shark,
i think when you say professional trader you mean one's that are in on the fix and those that can figure out what the fix is, like VAD. An amature is someone like me that thinks equities will eventually trade at their fundemental value.

shark... this part I would question: "those who bought the close yesterday as an investment were wrong".

As long as word "investsment" is in there, one day matters not. yesterday's firesale prices are not much different from today's if we are talking about investments... you know, those things people intend to hold for... not minutes... not hours... not even days... (drum roll) but for years (gasp).

Don't take it as irony, if it is - it's self-irony to the same degree :)

Dr C,

I don't know what gold is going to do. I do know that as the de-leveraging process continues and as the world slips further into oblivion, gold is vulnerable due to people's need to raise cash, which, last time I checked at the supermarket, is the "real money". Does it rally like Sally if the Euro goes the way of the dinasour, if Uncle Ben cries uncle, if Obama gets elected like my momma?

These are things I know not of.

I'm no financial genious Dr. C. If I were, would I be here right now?:)

"investsment" - ROFL, I can't even spell it right!

you know it's scary out there if you can't spell it correctly, Vad.

bobyo,

A securities time spent at it's "true, actual value" is minimal at best. Fundamentals are a bad way to pick stocks. Buy Vadym's book and learn about low risk high reward trading and forget about such notions as good companies/bad companies good stocks/bad stocks.

All stocks are good and all stocks are bad. It's a question of timing, and timing is everything in life.

Vad I get your point and I agree. I suggest that any firm or fund that's loeading the boat here and now is engaging in amateurish behavior. Time will tell.

thx for the response shark,
lucky for me i never thought you to be a genius,
just a well informed commentator.

thx

MS just did a moon shot...

Man,
Isn't that short-selling ban working wonders? I'm surprised some of these cratering companies on the list aren't asking to be removed from the list.

Next time they ban shorts hopefully I'll remember to heavily short the indexes at that point.

Rob.

Here's a great example. I bought some RBS this morning based on what looked like a turnaround on a 5 minute chart, same as we always did in the bull market. I paid 1.77 a share. It's at 1.41 as I write. Did I lose 37 cents a share on it? No I did not. When I saw the indices dropping and the price stalling and ten minutes had gone by with no advance I sold and lost 2 cents per share. That's throwing in the towel the right way, within reason. Never take a big loss (when it can be helped), and you will be around when the buying opportunities are real and are here.

SLV +5.3%
SLW -4.3%
?????

Perhaps the issue with the financials is exposure to British banks?

My money market interlocutor tells me that the Federal Reserve effort in the commercial paper market has restored a modicum of equanimity to that sector. But he says that the jury is still out on whether or not this is the solution to front end funding problems.In his view there are two areas in which the CP rescue is weak.

The Yankee banks are significant users of the commercial paper market and issue for size. In the glory days of the 1980s and 1990s when the system was awash in a sea of liquidity, many of these Yankee banks chose not to endure the legal and regulatory morass that issuance in the States required.

Therefore, many chose to repatriate there commercial paper issuance to the home country and fold it into to a global issuing network. That was a great idea at the time but does not work as well now as the Federal Reserve program requires that the issuer be domiciled here in the USA.

So that will shut out of the market about 50 percent of the issuers of CP. My trader friend suggested that possible European governments might consider a similar program.

The second problem is that the Federal Reserve facility only applies to the pristine A/1 P/1 borrower. It does not aid the lower quality A2/P2 borrower. These borrowers represent another 10 percent of issuers.

So the Federal Reserve is in the game but it will take the market some time to decipher the ultimate meanings of today’s radical actions.

http://acrossthecurve.com/

I'm not even particularly well informed. I'm just a suspicious S.O B. with a pessimistic streak.

teamonfuego... it really says more about my spelling abilities (fairly pitiful) than anything else :)

shark... I'll have to respectfully disagree. Building long term for a big fund position takes time and can not be done in one day and at one price. If such fund or company starts to building long term longs at these prices (some of which are qwuite amazing), yesterday was a good day to start.

teamonfuego

nice trade!

ALOHA !!

To all the gurus of Wall Street and the geniuses that reside in Washington DC and the experts at the US FED building in NYC take heed and really consider going to an AA meeting! YOU NEED IT ...

My favorite all time AA saying is ...

ALL YOUR BEST THINKING GOT YOU HERE!

Look where the greatest economical, political and military minds of our time have gotten us! Its all going onto the backs of the US TAXPAYER. The most abused and shunned entity on the face of the Earth!!!

ALL THEIR BEST THINKING GOT US HERE ...

ON EXPERTS
If you think you are an EXPERT ... you aren't!

ON ALCOHOLISM
Like a month ago when I caught a couple of my employees drinking alcohol(Spark). I asked them straight up.

Do you think you are an alcoholic?

They both replied instantly, "NO!"

I then said ... "That's just what an alcoholic would say!" We all laughed ...

I-CARD -

What do you see that has changed in Faber's outlook? The article you linked indicates that he continues to be consistent, as far as I can tell.

sold MS at 19.66

looking for my next 22% gain in 15 minutes. any ideas (hahaha)?

what a wacky market.

OK, I won't even try to correct everything in the above post... I am not even sure it was English, lol

ALOHA !!

I have already told you guys that the mining/junior sector is being brutalized by REDEMPTIONS and then I am sure some of the SHORTSTERS that were banned from the banks are visiting commodities! Anywhere there is a down trend there they are.

Will the idiot that abolished the UPTICK RULE please resign and report to LEVENWORTH!

putting a bid out at 17.5 on MS

Don't look now but WGW @ $1.08 US PESO

Initiated position in WGW @ $1.08

you are right to an extent Kaimu,

i got out of my jr. exploration fund a few months back and it was the only smart trade i made all year.

its gone down much farther than i thought it would.

whatever the reason is people are selling these stocks into the ground. w/ financing issues ongoing its hard to envision a scenario where the JR. market comes back save a massive new bull market in general equities, a reopening of the credit spigots and a strong move upwards in gold and other commodities to bring back the skeptics.

i dont forsee all of these happening, hence hwy i prefer the major miners, but they too are being hammered beyond belief and im starting to wonder if they might miss the gold train entirely as the metal makes a move towards $1000.

ALOHA !!

ON BOEING(BA)
What percent of their business is commercial airliners? Seems with the downturn in tourism here in Hawaii and other parts of the World as well as bankruptcy of airlines that would have some negative effect on Boeing's bottom line ...

Hotels are another ... Here in Hawaii last summer(2007) hotel occupancy rate was above 80%. This past summer(2008) occupancy was 60%! That's a 20%+ drop. How do most tourists get to Hawaii?

Anyone shorting the resorts?

unbelievable...they hit my bid 3 times at 17.50 and didn't fill it. its up almost $1 now for MS.

Mmmmhhhh...so does the expiration on the short ban get revisited?

bought apwr at 5.26.

Down, down, down..... par for the course.

Off Topic -
New box - migration from MS Explorer to Firefox got me through typekey and back into the blog... MS is so predictable.

Compaq - Yes, Athlon x2 (I dislike Intel for many of the same reasons I dislike MS) Lenore would've given me an optical mouse and better keyboard according to PC-Mag, but that's ok, recycled the old optical mouse and added 2GB mem to 3GB for $50 - Snap in 5 min. job. 22" LCD @$170 is nice... machine that doesn't hang or crash on every third active-x routine call; Priceless!!!

Market - What's it going to take? We need HB&B to step aside.

ALOHA !!

Bill ... How are hotels holding up in the Bahamas? Is tourism down at all?

Here in Hawaii, on the Big Island, until I read the newspaper that said hotel occupancy was down 20% and tourism overall down 15% ... I had not noticed one bit! I travel around Hilo and I still see the tourists wandering BayFront and Big Island Candies and MaunaLoa seem as crowded as ever! Only one tell was the number of cruise ships coming into Hilo is less!

The stress is on ...

Nemo,
Sure, the short ban is working so great already maybe they should extend it to all stocks and for the rest of the year.

Who was the idiot that came up with the short-ban anyway? Was it Cox or Bernacke?

Rob.

Sorry, I thought my facetiousness had come out in my comment. I'm just wondering if they'll revisit it now that Paulson won't get moving for another month or so.

If this keeps up UYG is going right to zero pretty quickly.

Rob.

sold 200 GG I brought yesterday and brought 400 UYG

wow--el bondo yield has been smoking for 2 hours now

Isn't that interesting, these deck chairs have "RMS Titanic" embossed on them...

I guess if they think it worked somehow, they'll extend it.

Maybe they knew the market was going to go off a cliff and were so bitter they didn't want anyone making money on it.

If that reasoning or something like that is the driver behind the short ban, they'll definitely extend it.

Rob.

I have a question to anyone.

Was there ever any mention of doing what seems to me to be the cheapest/simplest way to have dealt with the "crisis" — making low cost government loans available to individual home owners when/if they became unable to cope with an overpriced mortgage?

GE back below my bottom price from yesterday.

Do I need to sell more at the "bottom" to get this market going again?

Hi Grym,

Probably would not work with economies of scale.

I think it is much easier for Fed to dish out $50 billion here or there than it is to get a $5k loan to a homeowner.

US really needs something like this.

http://www.rentbackmyproperty.co.uk/

Update of the IWM 67-68 straddle played prior to the wall street bailout vote.

The IWM 68 calls are currently trading at $0.10, for a nearly 100% loss.

The IWM 67 puts are now trading at $8.40 (traded as high at $9), 4.2X the purchase price of $2.

IWM is great for this as the bid-ask spread is very narrow.

bsi87,
"...when crude is dropping like it is, it makes alternate energy stocks including solar and oil sand less attractive."
Which is exactly what killed companies in the 1970s who tried to develop alternatives.

Bill - gold is rising in real terms, however I would have expected a sharp nominal rise as well.

I cannot believe this poor excuse for a reflation. Certainly it is difficult if not impossible, however we should have seen real equity or debt injection from the central banks by now directly into the banks to accomplish the most effective shoreup of the asset side of the balance sheet and we should have seen the Fed, BOJ, ECB stand up in unison and commit funds and slash rates all on the same day - no such effort yet. Confidence has completely evaporated.

All of Bernanke's talk of being early to the reflation effort are lost in a quagmire of seeming ineptitude.

Clearly the powers that be do not understand the CDS market nor how quickly everything can unravel given the magnitude of derivative exposure and counterparty risk.

I see a little strength in some major miners today, but at this point it does seem that physical commodity prices are set to continue lower. Inventories on the other hand, are a glimmer of hope so far anyways.

Kim,
if your observations are so, won't this cause a meteoric pop in the S&P pretty soon?

re:alternate energy

yup. conservation kicks in, slow economy, etc. and oil responds per usual.

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

Kim - Thanks for the Hedgie post, I recall that discussion previously and appreciate the insight.

US Property - What a mess!!!
I quick-sold a property 3 blocks from beach in So. Cali. at $880k this April where it might've gone for $1.2M a couple years ago. Let one go in Austin late last year at 12% off peak. I was a horder but getting to the point can't keep everything, especially so far away!

Si02,

Can you post a link for that WPost article re: AIG St. Regis Resort? Can't find the article anywhere on their site.

Thanks

Certainly mojo: http://tinyurl.com/aigpigs

back in MS at 17.70

[Bill Cara note:

Did most of these banks plunge in share price today after getting notice of the new, much higher insurance rates they must pay to FDIC on their deposits? Is this not the death knell for buy-side support of HB&B shares? I continue to recommend avoiding these banks. Let the weakest ones fail. Then we can have confidence in the strongest ones. That process will take some time to work out. But, as I say, there are other stocks that are ok to buy -- XOM is up today. My BA idea hasn't worked out yet -- it's down -3% today to 49.80. The numbers below 50 (which was my level used for calculations) look better for prices you pay below 50.]

DIG a real bronc today!

Looks like the gains being sold of in SKF SRS FXP

Shark - Flying blind! Pessimism is looking pretty good right about now... We're not there yet based upon my POG indicator, which also is a manipulated indicator. No such thing as realistic indicators.

2nd
Look like we miss read the market.
If we brought SRS/SKF/FXP/DUG/SMN any day with in last five would have made killing.
Even buying this morning would have given us good return
My OEX option I did not sell for 30 this mooring and now you can buy fewer than 18.
Well, I should do better than this?
Will do well on long I have

Jaketh,

Ben says: "We have to be careful not to declare victory too soon."
There's a challenge for ya!

Well, there goes the "Mission Accomplished" sign.

Yesterday on Fast Money it was noted that the bailout bill gave the government was given an additional tool to work with — the "direct injection of assets into troubled companies." aka, a cash handout.

Bernanke offered such a remedy as possible back in a 2002 speech stating they could, if necessary simply buy private assets.

The question in my mind is...
Is this the economic equivalent of the VietNam claim, "Sometimes we need to destroy a village in order to save it,"?
Goodbye private enterprise, hello socialism.

Thes guys must be stopped.

Kaimu:

How do most tourists get to Hawaii?

if times keep getting bad... by boat as they flee the mainland... I keep thinking of the canary islands and the people from Africa fleeing to try to make it there.

one thing about being so far away from every mainland Hawaii wont see an influx of refugees if things get bad,

Kona and Hilo have lost 1/3 of the cruise ships and single ship brings in 1,000's of tourist at a single shot.

But I guess one reason we have lost so much in the tourist trade is supposedly the VOG also. Pele is keeping them away at the moment.

I'm definitely very surprised here. The selling is relentless. Even positions I entered yesterday are now a good 3-4% under water! Nevermind the positions from last week or the terrible moves from 2 weeks ago.

At this pace, what will be left? S&P is 1% from falling into triple digits, Nasdaq is down 20% in 2 weeks!!!

Kaimu,

Speaking of traveling & entertainment, they really puzzle me. I do a lot of traveling. I don't find the flight is particularly empty. The airport parking is still full. I books a flight from east coast to west coast on this Thursday. The whole flight has 10 seats left as of now.

Two weeks ago on Friday night, I tried to have a dinner with one coworker from out of country. I could not find a single restaurant, which had no a long waiting line. That is an amazing. I told my friends who said there is a recession. Americans are still spending the money.

BA - Seems like a good choice for a classic put underwrite, instead of direct share purchase.

Also, it seems like a good choice to pair with a 'short the market' hedge. You would net +.6% so far long BA/short DJIA.

I don't understand how wiping this many gazillions of equity value off the books can NOT lead to a massive worldwide deflation.

But hey, I don't know much.

[Bill Cara note:

A couple trillion in lost shareholder equity and debt held in the banks will be replaced by a couple trillion new money being printed by governments, central banks and re-capitalized banks. Credit starved companies and individuals will go through large losses, but the strongest will survive. Non-financials in production, manufacturing and services, will suffer the economic slowdown, but the strongest will survive. Life will go on.]

Re: What's the next move in the price of gold?

Well, its already happened in the Australian dollar:

stockcharts.com

http://tinyurl.com/4rsesw

[Bill Cara note:

A Swiss banker sent me this note. Shows the black humor that besets markets under stress...

Due to recent budget cuts, lack of funding facilities and the rising cost of energy, the light at the end of the tunnel has been turned off.]

long XTEX

I notice GG held up like a rock beside HGU.to

It seems that the "pro's" who are closing the market today aren't nearly as sanguine as those who did so yesterday.

What's wrong with them? Do they not sense the buying opportunity that these prices represent? Or is it maybe that they don't want to own stocks?

Hey Mike how ya been? Email me sometime bro I miss you.

BAC taking it particularly hard in the last little while.

needed that laugh bill...good one

sv

AIG gets an 85bil hand out from the US taxpayers, then a week later the exec's take a 1 week celebratory vacation to a luxury resort raking up a bill of $440,000.00. When they leave they pay the bill by signing "U.S. Taxpayer." That used to be called forgery, a felony, punishable by a long prison sentence. I guess when you are well connected, forgery is an accepted practice in this U.S. society.......
Frickin crooks and their pampered brats need to enjoy their special privileges and gated communes now, because some day they may not be the ruling society snobs they are now!
My only question would be, how much fraud goes unnoticed, day after day, after day?

Where is the next support level for the S+P? How far back are you going to have to go to figure it out.

Mmmmmhhhh...margin requirements up, credit disappearing...Bill talked about the broken Mutual Fund model. Isn't the hedge fund model, at least in the current environment, also broken. If so, all that money has to be liquidated (well, what's left of it).

Dow 9500

"The clock is ticking, and it's one minute to midnight," Barclays Wealth wrote in a note to clients.

Anyone buying RBS into the close?

http://tinyurl.com/3e5svk

Nemo,

According to one of the former Gods at Lehman who's an acquaintance of mine, he says to a friend of mine:

"Our entire model of money management is broken".

long UHS. Capitulation.

My friends, I salute you!

Have an excellent evening.

TSX DOWN 427 POINTS

SV

S&P 997

TSX closed down 417.18

Shark - I'm hanging in there. I'm having multiple computer/internet problems at home so I'm limited to work systems, work time.

GGP - I saw this name was discussed earlier today. A day or two ago I pointed out that GGP had become infamous when, immediately after being put on the no short list, principles/founders sold off $40 million of their own shares. Nice not to have competition when selling your stuff.

The market finished the deed by selling it the rest of the way down once word got out of what these guys were up to.

It might make a nice fast trade if it's oversold. And as a REIT it's got a dividend, if it holds up. But if the principles don't want the shares, no one else should either.

SPX down 60 @ 997. Good. Only 17 more days like this and we'll be at 0 and I'll be out of my misery.

TSX down 2732 points since Sept 25

MikeNYC

The dividend won't hold up on GGP. THey are in a world of hurt to refinance their debt, and facing big vacancy issues on many of their properties.

DJIA makes a new low, BA did not. That is significant.

Was Alcoa (AA) halted after-hours? Why?
Earnings release?

ALOHA !!

You guys are forgetting one important point about miners and juniors. Their stock certificates are essentially backed by gold/silver or other metals. Mining stocks are "commodity backed money"! Someday that will reveal itself ... What is a US Peso backed by? Granted not all miners and juniors will survive, so you need to be diligent.

FUTURE FLOW CHART
Cannot afford an ounce of gold >>>>> they buy silver >>>>> can't afford silver >>>>> buy stocks >>>>> no silver or gold supply >>>>> buy stocks

The REDEMPTIONS are unwinding the excesses of the hedge funds and unfortunately the baby is getting thrown out with the kitty litter! Its the same mentality as CARPET BOMBING during the Vietnam War! You just have to stand aside and wait for the last bomb to drop ...

Look at what the US TREASURY has turned into lately. I will start calling Washington DC ... WALL STREET SOUTH! Now we have the BELTWAY CULTURE mixed in with the GOLDMAN SACHS CULTURE! How do you think all this will end? You need to give WALL STREET SOUTH at least a month until all the hyperinflating starts up in earnest(don't count the $1.3tril plus so far). Does anyone here really think the bailouts are done? Look at the headlines today about the US FED and who they are trying to "rescue" now! Commercial paper no less ... States and counties and on and on ... I mentioned last week that at some point my orchid farm might qualify for a "temporary" loan at the FEDs discount window! Looks like I better get going on my BEARD ... No better way to impress your boss than to emulate his appearance! BEN BEARD = ME BEARD I mean look at Osama Bin Laden's closest allies! They all have BEARDS! BEARDS ARE IN!!! If you want to look like you're an EXPERT at something then you gotta get a BEARD! Whether its terrorism or finance ... politics or education! GET THAT BEARD!!! Women? Hummmmm ... what the heck ... YEAH ... GO FOR IT!!!

We now have the worst of the worst two cultures mixing and mingling in WALL STREET SOUTH! God only know what those DC Christmas parties will look like this year? Soddam and Gamorrah is BACK BABY!!! YEAH !!!

We have the BIGGEST SPENDERS IN THE WORLD merging with the BIGGEST THIEVES IN THE WORLD! Are you confused as to who is who? YEAH ... that's my point! THERE IS NO DIFFERENCE BETWEEN WALL STREET AND THE US GOVERNMENT!! They have achieved ONENESS! If that's not a COMBO to guarantee the US Peso's demise I don't know what is!!!

I am more diversified into IN N'OUT BULLION' Then miners and juniors. Yet I am still waiting on the sidelines patiently ...

By the way ... the ASX is looking particularly cheap especially if you are buying with a US Peso! Right off the bat a 30% discount on some of the most resource rich assets in the World!

nemo,
I agree on the sustainability of the div. I'm just throwing it out there for completeness. I was short GGP earlier this year, too early, and it seemed the yield kept it afloat above certain levels. Those days are over.

nemo....do you recall when Bill spoke of the broken mutual fund model? I don't get a chance to look at everything here. Thanks.

Kaimu... I take sever umbrage in your BEARD insinuations (big grin)

Alcoa up 7% after hours on earnings (erases days losses).

Why don't they just call it a 'bankers strike?'

thx for the post kaimu,

i think Newmont is having some problems, driving the GDX/HGU lower while barrick and GG are holding up well and look poised to move higher.

if anyone has thoughts on whats going on at newmont id be curious to hear.

at some point, the miners have to recognize the inherent value to gold should it begin to breach the $900+ mark and stay above there for a while.
but at what relative ratio?

i remember the HGU.TO was at $30 when gold hit $980, now we are at $9.75 with gold at $883. i dont forsee the HGU rising near $30 should gold return to $980. at current levels the HGU would be about $18. it would take $1200 gold to get it there! thats all assuming the miners:gold ratio doesnt sink lower from here!

i like the miners for their leverage rise towards gold, but with it breaking down badly i wonder if there is a puke point or if they will follow the market until the bull really does return.

Kaimu:

I am facially coiffed also.

Schleprock:

Yes, schleppy, that was why I brought it up. Bill has mentioned that the mutual fund model is broken.

We have the wrong leaders. and if we vote them out the greedy will just replace with more wrong leaders. I would love to see a presidential candidate bebate the economy and what occured on wall st, with the likes of a Bill Cara a Ron Paul. Someone who understands.

Step 1: Every tax payer in U.S forms 1 national union.

Threatens to do below steps if the right people and right ideas dont start heading to lead:

Step 2: every tax payer hoards cash, pull out of all financial markets.

Step 3: stop going to work and stop paying taxes until things change.

But these two above will never happen because citizens are to paralyzed if they cannot make payroll every 2 weeks to pay their debt. or if step 1 actually started to mobilize the leaders of that movement would be brought to "justice" as a matter of national security. Fear is a great weapon.

NASDAQ down 5.8%, but NOK held up really well through the day at around $17. It was beaten down a little in the last minutes when sell off accelerated, and ended up at almost break even.

The only news about NOK I saw today is that MS initiated coverage on NOK, and placed a price target of 17.5 euros ($23.8). Assuming I didn’t miss anything, and this news alone was able to hold NOK up in yet another big sell off day, does that mean the market is not panic enough and the worst is yet to come?

Could corporate America be selling their short term investments (such as stocks) in order to get access to cash that they would normally get through the commerical paper market?

I'm really clueless about these things but was just wondering about where some of the non-stop selling was coming from.

Why is the mutual fund model broken....basically because fund managers just managing OPM w/o fiduciary responsibilty?

Schleppy:

8 out of 10 mutual funds don't meet their benchmark. Now, I think we can reasonably agree, that any success in equities will be with targeted, focussed portfolios, which is not a specialty of most mutual funds.

Bloomberg article on the $A gold price windfall:

http://www.bloomberg.com/apps/news?pid=20601080&sid=aSHdt.YQXT9k&refer=asia

Excellent article on debt deflation v. monetary deflation:

http://www.itulip.com/forums/showthread.php?p=52818#post52818

Thanks to the short selling ban, we have failed to see a nice pop short covering rally. Ban stops tomorrow around noon I believe.

Wouldn't surprise me to see everything in the tank again - would seem to be the punishment to expect for interfering with the markets in this manner.

What do you all think will happen?

MCM

SPX weekly RSI(7) = 8.72

Just wondering if anyone has any advice on day trading, I havent done much in the past but as it turns out I have no choice but to work on it.This 33 $ up day in gold following the 20$ up day yesterday with the shares behaving badly has really hurt.

Timeframe of chart,indicators etc. So far I am leaning towards macd, rsi and 50,2 bb's with a 50 and 200ma on a 60 m and 10m chart?

I thought I could buy and hold gold stocks but I am almost ruined from that strategy.
tia

ALOHA !!

THIS IS A MUST SEE !!!

Okay you guys ... If the market carnage is getting to you then its time for a LAUGH ... Of course the LAUGH is onus ... but what the heck ... be a good SPORT!!!

Here is the BANNED SNL(Saturday Night Live)skit that was not aired during the $700bil bailout debate in CONgress.

Once again satire is more truthful than the CBS evening news!

LINK: http://tinyurl.com/3q45wj

BAC - Interesting note: Last night around market close (maybe just prior to close, not certain) I received two telephone calls from BAC... They left a message to return the call (long distance). Well, of course I didn't return their call but it left me wondering if they were selling stock...

Brown-Cal,

I'd suggest that at least part of today's selling came from margin calls. Volume was not very impressive throughout the day... maybe someone better familiar with big picture of the market can help nail down the origin of the rest. Buying was passive, bids were withdrawn easily, with no real attempt to support the market - kind of 'I'll take some if you insist but I am in no particular rush, any better price available?" Indded, better prices were offered.

Earning Seasons & AA -

I don't know how the analysts come up their estimate number. But, they are sure too high for this environment. As such, the companies are set up to fail. Then they'll come in with a downgrade, and a price cut in a few days -- three different strikes. I can't help but feeling doomed. AA's last quarter earning was 0.48. In the meanwhile, Aluminum prices dropped 50% and the analysts estimate went from 0.69 3 months ago, to 0.70 a month ago and finally 0.54. AA reported 0.33 today.

I watched RIMM missed by 1 penny and is still getting creamed.

Wonder if the US governMINT will be around to collect taxes next year...

http://tinyurl.com/4pbo5x

Wow, life really screwed over Dick Fuld...and other musings.

Sept 2003 Dow was around 9400 and it took 5 year to peal in October 2008
And it took one year to go back to 9400.
So, Dow is not going to reach its peak in six month or one year.
This time it may take more than five year to reach it peak of 2007

Kaimu,

With regards to the juniors, do you still have a postive view about GIX?

Thanks.
K

Beginning to think we'll witness truth exposed....???
Ben Stein: How to ruin the US Economy (let alone world economy).

http://tinyurl.com/4mqvkz

Didn't see anything about how many applications were steered away from fixed mortgages in favor of ARMs and why... a no-brainer duh! IMO.

If only I were a financial engineer too!

bsi87-
RE: OIL SHALES

Maybe if they used a large solar array to get the input energy for the extraction....

Mutual Funds.... Yeah almost 85% fail to hit their bench mark.

DYODD - on what exactly is their benchmark, mangers style, why would you get involved with a mutual fund.

I can't begin to explain how so many managers fall off the beaten path. Meaning if you are a small cap manager, buy small cap stocks! When looking at funds, make sure they are living up to what they are specifically suppose to invest in. Small cap managers should not be buying LARGE CAP tech/energy companies.

Their bench mark is essentially a list of stocks. That is it, it seems that when they get fancy and try to recreate a basic strategy they always seem to lose. Should/if one were to invest in mutual funds, make sure that they do not hold more than 3% of the holdings in one company. Also read up to find out how the manager/managers psychological trading/investing techniques are... meaning what is their plan?
Bigger fund doesn't mean better, remember that. There are good funds out there, and a morning or lipper rating does not mean GOOD fund.

vadym - i work almost exclusively on hedge funds and i can tell you that many of my clients and people i know that are at other hedge funds are completely liquidating with the exception of gold stocks.

vinod - Right, Something else to consider are the trillions of bad debt in today's markets... $60T? S&L-101 multiplied by who knows what??? They won't tell us...cause it's not pretty.

What got S&L crisis kick-started? Was it simply the FDIC increasing insurance from $40k to $100k? Some think so! Small potatoes to what we've got now my friend!!!

mebea - Oil Shale - How about a small portable nuclear reactor for heat energy? There's at least one in the design phase/test mode now, maybe more...

Chickenpookie -

Now you're talkin'! But I like the solar array as it would shift R&D funding to alternative energy. Though, I'm sure those getting the oil would know that which is probably why the nuclear option was adopted.

Heard the other day from a friend (dad) that for the first time in almost 30 years, 8 nuclear plant permits have been approved to get started.

I wonder...
how many jobs are created to build a new nuclear plant?
how long does it take?
once built, how many jobs are needed to keep it running?

Also in MN - first steel mill permit approved. new steel plant on it's way.
How many jobs will be created because of that?

My questions are the following and hopefully the debate tonight they shed a little light on this...
(with budget cuts, there is not light to shed :( oh well)
Back to my point, tonight - LETS hear about JOBS... WE need jobs to be created... I want to hear a plan.

I know nuclear and steel mills are not "green" in the eyes of some in this country but IMO we need jobs instead of higher employment.

It seems that we are trying to fix this problem top down, putting money in the hands of the few, may not be the best idea. Moreover it would be just as bad as putting money in the hands of the many and hoping it will go up. It won't.

There has to be a comprehensive plan to get the ball rolling...
I want to hear a plan from one of the puppets looking to be president. A plan that isn't spoken is nothing more than a dream. All i have heard so far, aren't even dreams...

Norm: re / Nuclear Power

Here's some rough numbers for building a nuke plant.

3-4 years permit/engineering, 4500 workers for construction,
4 yrs to build, 1500 workers to operate
plus lots of periodic maintenance pojects over the life of the plant.

Two unit Plant cost= $6-$8 billion per unit plus transmission infrastructure if required.

Probably about 10 cents per kilowatt.

It takes lots of capital and then there's the waste issue

Well, I have seen it all now! Through work, we make RRSP contributions (US: think 401K) to a very large Canadian Mutual Fund company that shall remain nameless. I regularly track the performance of 62 of their funds. Today, I noticed in the prospectus that one of their largest Canadian "balanced" funds (50% Equity, 50% Fixed Income) has their 3rd and 5th largest holdings as SIJ and SKF (that's ULTRA short US Industrials and Financials). Not exactly sure how this meets their Fund Objectives of "...investing in the securities of Canadian issuers.". I'm not sure if they should be applauded for their ingenuity or chastised for failing to deliver much needed support to the Canadian equity markets.

Re: Bullion Lease Rates

Lease rates going vertical:

http://www.kitco.com/charts/popup/au0030lrb_.html

vinod- yes, we misread the market...

in terms of bottoming, i like today's close; it brings us much closer than yesterday's action...

climbing Mount Everest? if i were to offer you any words of encouragement, it would be to remember the close on 9/26...both of us hit highs that day, so if we've all been forced back to 9400 feet, then 11143 gets us back to base camp, which seems like a climb, but nothing like getting up to 14128...

wavesmash,

I guess I'm just having a hard time accepting there are very many people dumb enough to go for a loan with a low interest that will jump to high interest in a few years. What percent of the loans made in the past seven or eight years can this be?

I'm thinking a gov. low interest loan only for the increased monthly payment and only those people who really bought a house to live in. Anyone who bought, no money down, with the idea of flipping it should get a flip of the finger and the same for the lender.

Carl Icahn is organizing a group called United Shareholders of America to combat the overpaying of both CEOs and boards of directors.

As one who has tried to protest as an individual and been frustrated, this looks like a step in the right direction. It works for the NRA and we've nothing to lose by trying.

His explanation of why and what is at this site —

http://www.icahnreport.com/report/2008/10/join-the-united.html

(Sorry, it would not tinyurl for some reason.)

Re: Nucelar power - info from an email I have

"The nuclear industry claims that nuclear-generated electricity costs 11õ/kilowatt-hour (kwh); electricity from the newest nuclear plants costs 15-25õ/kwh. It takes from 7 to 12 years to build a nuclear power plant. Yet, conservation and efficiency programs cost between 0.5-4.0õ/kwh, and can be implemented in between 6 months to 2 years. A healthier, more common-sense attitude of using less energy, combined with state-of-the-art electrically efficient products (appliances, light-bulbs, motors) could make nuclear power totally irrelevant in our energy future."
In fact nuclear costs much more. It costs about $3 billion dollars to build a nuclear power plant that supplies 1400 Megawatts. Toronto uses 3000 Megawatts/h on a Saturday.

It remains to be seen how all of these new plants will impact the price of uranium and in what time frame. There are definitely juniors out there that are crushed.

2nd
Yes, we might go to 11000. Not higher than that.
And may bounce around 9000 to 11000
After all earning will drive the market and there is nothing that tells us earning is going to go higher and higher.
Also when market sense the result of election some sector will be sold like defense and health care
Interest rate may stay low for a while so I might sell all of TBT
And use that money to buy stock like FCX/XOM

"I guess I'm just having a hard time accepting there are very many people dumb enough to go for a loan with a low interest that will jump to high interest in a few years. What percent of the loans made in the past seven or eight years can this be?"

well, the thinking process would go something like this: every time we visit family/friends, my wife/girlfriend/family is looking at the great homes our friends/colleagues are buying, and we're stuck renting this dump...even my gardener is in escrow right now-> that's not all, man: they're leasing a new Lexus every 2 years borrowing on their home, and the home goes up 20% a year!-> WTF am i doing putting my paycheck into savings every 2 weeks, i'm on the freeway to no where-> OK, let's do it-> it's got to be in a new development next to our friends-> we've got to have decent furniture if we're going to have people over-> can't park the old truck in the new driveway, man-> homeowner's dues-> private schools-> now we're both working two jobs-> too tired to cook, let's eat out, we deserve it-> a year later, it's WTF, the house payment is another $600/month-> you get the picture...

vinod- we didn't believe the market could go to 9400 in one week, and i can't blame you for thinking it's impossible for it to hit 12000 in another week...

Re: Nuclear Fission

Nuclear fission is an old way to produce energy. Its like using coal to provide steam energy. It was developed as a way to produce energy based on a science which is at least sixty years old, by now. Fission is a thing of the past, and we have some inkling at least by this late date what energy will look like in the medium term. It does not involve smashing atoms.

Ok, so our previous posts suggesting a major downturn in the U.S. stock market this week has played out as expected. So what is next?

Well the second half of our view is that we get a major rally that creates a bear market bottom. Current trading in the marketplace has reached near-panic with fear ruling the trading session. Recently all of our short-term price (technical), monetary and sentiment indicators turned bullish which historically have signalled a massive turn up in prices.

Additional downside in the market over the next trading session or two should elicit a response by the Fed with an announcement of an emergency cut in the federal funds rate. The Fed will be forced to act and will not have the luxury of waiting until their next scheduled Federal Open Market Committee meeting on October 28-29. A cut of 50 or 75 basis points by the Fed could be the catalyst for a market turnaround. A coordinated cut with the European Central Bank, the Bank of England and other global central banks would be an even stronger catalyst for an upturn.

Note: The SEC ban on short-selling financials ends tomorrow at 11:59pm ET.

Stay tuned!

JWibbs

p.s. for those who are interested, check out our website for our March 2007 research report on the U.S. Treasury yield curve inversion that signalled the coming bear market in stocks and our January 2008 report on the sell signal in the market averages that confirmed a bear market had begun.
http://www.2globalmarkets.com

mebea - "Though, I'm sure those getting the oil would know that which is probably why the nuclear option was adopted."

I should point out that a nuclear powered shale oil reclamation option hasn't actually been adopted to my knowledge, just that this has/was proposed sometime recently and that research, design, and I believe construction of prototypes have been done. From what I've read, NRC permits have been applied for, or are in the process of negotiation.

That's about the extent of my knowledge on this subject without performing any kind of in-depth research, except if I recall, the company noted in the article I briefed, was privately held.

navid - I've heard/read similar on cost of ownership. Perhaps we should look to France for their economies of scale. If memory serves me, their electric power generation is somewhere around 70% nuclear. Also, I have the impression Germany has decided to invest in solar instead of nuclear.

The manpower requirements laid out by astral25 are similar to those I recall from memory. I live a short distance from a nuclear power generation facility, in between the waste heat treatment facility and water intake supply reservoirs. In my county, there's quite a bit of discussion going on a continuous basis regarding these subjects.

shark- giving credit to you for calling for a multiple-thousand point drop...for all intents and purposes, we got one...

or is it 'cuda now?

They had better fix the TSX home page if we start getting 1000+ point up days.

Didn't work on Monday when we had that 1000+ point drop. Nobody figured a > 999 point drop was possible?

I wonder how many other glitches that caused in computer models & algo trader programs.

I bet they will be corrected tomorrow and we'll see a bounce?

JWibbs
what next if there is rate cut tomorrow and market goes down 500, just like bailout plan?

for anyone who thinks a drop to sub-5000 on the DJIA means the end of the world, take a look at the Nikkei-> 40000 to 7607 in 13 years...

2nd - in a way you can say we have had a similar downslide over here in the states, what with the NASDAQ down some 65% and the S&P 500 down some 33% in the past 8 years.

Hi Grym,

I don't think people are dumb when they take the low interest teaser rates. "Free money" is free money. It would be hard to turn down, just like that free Florida cruise or the fact that you may have already won the publishers clearinghouse sweepstakes, or your 1 in 100 million chance of winning the lottery, or your uncle in Nigeria left his fortune to you and only owes $1000 back taxes on it.

You (and the salesperson selling you) will tell you that the rates can be fixed at any time, just get off the couch and fix them.

But it's hard to fix them when they go up 1% overnight. (like today's TD bank rate hike announcement)

I think that the pressure to sell more and more mortgages at any quality to add to these bundles of mortgage securities was what caused some of of this disaster.

In August,

"Owners of 303,879 properties, or one in 416 U.S. households, got a default notice, were warned of a pending auction or foreclosed on last month. That was the most since reporting began in January 2005."

I bet some of those people have PhDs and degrees in economics and finance.

Not that that makes you smart or anything...

Mish published some more stats.
http://tinyurl.com/3lqhzg

This is interesting. AIG has already used most of its Fed Loan ($61,000,000,000). See http://tinyurl.com/4qtpxh).

I am believer of market reversal. I started and increased long positions in the last few days. I see the major risk in long and pernament contraction of stock fundamental valuations. To simplify, let say that P/E of 5 will become the norm instead of P/E of 15. Stocks would not recover under these condictions. Can current develeraging process yield to such a change? Let say that you can only buy a stock with cash and no leverage. Can stocks become significantly less valuable? I do not think so in the long run, but it could happen in short run. I think that is what we may be seeing. The houses and now cars and refridgerators are becoming less valueable because people cannot buy them using the credit, right?. So there is a temporary decrease of demand, but it is not likely to last longer than months/1-2years. You do not hear it in the news, but I would not be suprised if professionals cannot used same level of leverage for stocks like a year ago. Any comments?

teamonfuego- as bad as things look right now, the US still leads the global economy, and is still brimming with opportunity...i met an Indian colleague in his forties when i moved back to the bay area in 1990 (which was in a recession)...can't recall which country he had emigrated from, but he and his family (who had been well to do) had lost everything to some type of repossession by the government...he came to the States, went back to school, went into a new career, and by 1995 had purchased a home in Marin county...eventually i lost contact with him, but guessing he's closing in on retirement now in decent shape...

could be right vinod.

""So long as the public is convinced that we are not out of the recession, I don't think rate reductions are going to have much immediate impact" on demand for loans or bank lending, said Ezekiel S. Ketchum, president of Meridian Bank in Reading, Pa. "People do not go out and buy a car just because rates are down half a point," he said. "

http://tinyurl.com/5yuqqd

vinod,

I invest on price only, so the market could trade down 500 and then the Fed cuts or the Fed cuts and then the market trades down 500. Either way, I've found the best way to execute is to do all of my analysis to generate my target price (for a market average or a stock). The target is the price that I'm absolutely convinced will lead to a change in trend (in this case a buy price below the current market that will lead to a reversal to the upside). Then I adjust the price target by a margin-of-safety to account for the errors and missing indicators in my analysis and the fear and greed that pushes markets to extremes way beyond my "convinced" price.

biochemist- i think you're right...multiple contraction is common at bottoms (when growth rates are projected to slow or decline), whereas multiple expansion is common at tops (as analysts overestimate growth rates)...

what happens when earnings for tons of companies fall flat on their face? how do we rally from bad results. that is not a rhetorical question.

teamonfuego, thanks, this adds to the whole picture. Interesting, just how much is there left to liquidate?? :)

2nd - I figure worst case, if my portfolio losses were equal to or less than 50%/day, theoretically, my port would last for eternity. Just hope we don't experience that...

NYUgrad... good question... it's actually not out of realm of possible. It all depends on market mood. Remember how during financials rallying they would go up announcing earnings miss? Ot how companies would beat expectations and still get sold down in bearish environment? If market sets in bullish mode on simple imbalance in favor of buyers, everything will be forgiven, span out in positive light to insane degree, positioned aas "reflection of past troubles, company is out of woods now in improving business climate" etc etc.

Not saying this is what WILL happen, rather answering question "how is it possible"

vadym - i'm not really sure how much selling is left, but i'm getting more optimistic the more i hear people at my clients saying they're throwing up their hands and just liquidating everything. it could be bad for me because my clients may close up shop, but i think we're in the final down phase of this current bottoming out phase. it may go down to 900 S&P, but i think the snap back when the credit markets ease will be quite severe.

in the meantime, i'm watching the TED spread with an eagle eye. it was down almost 10% today, which is a good sign.

"just how much is there left to liquidate?"

Vad- good question...there must be a thousand ways to make educated guesses..from a common sense POV, i think the unwinding of speculation is closing in on a landing point:

(a) here's a headline from Yahoo Finance: "Retirement accounts have lost $2 trillion, leading Americans to keep working, stop saving"

http://tinyurl.com/3j7b8l

"Americans' retirement plans have lost as much as $2 trillion in the past 15 months -- about 20 percent of their value -- Congress' top budget analyst estimated Tuesday as lawmakers began investigating how turmoil in the financial industry is whittling away workers' nest eggs."

(b) if you use the S&P500 as a benchmark, then the average index portfolio has dropped 36% in a year...

(c) DJIA 9400 takes us back to 2003, when housing prices were high, but (IMO) still at the upper limits of a normal range (ie, a 30-year fixed was still the way to go)...

so if the question is how much do Americans have to pony up to 'pay' for the excesses of the last decade, then $2t just might cover it...postponing retirement +/- living lean for a few years to replace the lost equity in homes and accounts may be sufficient to pay the bill...

I agree with sentiment. Today's selling didn't change my pereception of bottoming out in progress

2nd,

thanks. Interesting analysis.

Shale Oil - Oak Ridge National Laboratories Whitepaper about using nuclear heat generator for shale oil extraction: (I haven't read this yet, i.e. don't know detail, read at your own risk)

http://tinyurl.com/3plvlx

"how do we rally from bad results?"

it may have nothing to do with how bad the results are at face value...the mood right now is so negative that some companies are priced for a high probability of bankruptcy...if results are bad, but not as bad as the bleak scenarios playing in investors' heads right now, the relief could result in a powerful rally...

trading is all about human psychology...if you use the bipolar personality as an analogy, then it's easy to imagine how a worried/depressed perspective can artificially drive prices down to where they are now, and also how a relieved/manic perspective can take them right back up again...haven't we all seen the difference in friends right after a break-up (sleeping till 2, dressing down, no interest in going out), usually replaced by a new haircut/clothes/attitude weeks later when they've found a new date? do not underestimate the power of the relief rally when it comes...

ALOHA !!

As F6 pointed out the lease rates for gold have jumped significantly. The five year average for gold lease rates has been .12% and as of today it is 2.649%(a 2200% increase). The global central banks gold "loans" have dried up. Looks like the fear of not having the gold loans repaid by flaky counterparties means that not only do banks not trust loaning fiat to each other but they don;t trust loaning gold either! Look at the lease rates as a gold LIBOR between central banks and bullion banks of which JP MORGAN is one of them! Remember JP MORGAN runs GLD as administrator and custodian so yet another gold "supply line" is drying up. If GLD cannot get supply its business is dead! RED FLAG ...

When GLD fails then GLD investors will sell and move into their own physical(which is drying up on the street level)or they will go to the GoldCorps of the World. The investors get fiat while JP MORGAN gets the GOLD! Good move GLD investors ... you shot yourself in the foot! Maybe you'll want to rush over and get a US Savings Bond with your vast wealth! No PM but plenty of paper!

Hey look its 1984 !!! NOW ... we get this out of Canada that due to "terrorists" and their money laundering using gold bullion(right?)the Canadian government is tightening reporting requirements of who buys and sells gold, silver and diamonds. It is all shaping up to be a CRIME SCENE alright but not for terrorists ... for Canadian citizens and I am sure soon to be , US citizen. YES, CSI fans tape off the CRIME SCENE and mark the outline of the body. Its the dead, lifeless body of the global taxpayer!

READ ON:
NOTICE TO DEALERS IN PRECIOUS METALS AND STONES

Effective Dec 30, 2008, new requirements under the Proceeds Of Crime, Money Laundering And Terrorist Financing Act, will apply to dealers in precious metals and stones. In order to help you prepare for these new requirements and to provide more information, FINTRAC representatives will soon be holding information seminars in several cities.

MONTREAL - Oct 16
HALIFAX - Oct 17
EDMONTON - Oct 20
VANCOUVER - Oct 21
TORONTO - Oct 27

I think the markets message is they want a rate cut loud and clear.
I got lucky wit my SKF buy this morning...caught the last 10 points....to offset my losses in SSO/QLD,etc/
Question for Bill-how did MER, BAC, MS, GS et al get smoked today with a ban on short selling? BAC and MER took major hits, as did MS. Funny that GS closed around $115...buffet put? what happens on Thursday if the short selling ban expires?

"I figure worst case, if my portfolio losses were equal to or less than 50%/day, theoretically, my port would last for eternity."

CP- all i can say is, there's optimism, and there's desperation...just kidding, my man ;)

"how did MER, BAC, MS, GS et al get smoked today with a ban on short selling?"

short interest is a long's best friend...without it, stocks like TASR/OSTK/LEND/and even CALM would probably be companies you know little to nothing about ;)

make that SYMBOLS you know little to nothing about...

2nd,

Just got back from a Roman orgy. Thanks for the thanks, we got one indeed (1000 points more or less sort of).

Question is, are we about to get another one? Since they're selling 'em in Asia tonight, I dunno. I hope for you guys who are holding that it goes up. And it will one of these days, right?

As far as your colorful mountain climbing allusion is concerned, Remember, Edmund Hillary went up, but so did Rob Hall. And a quick glance at the charts reveals there've already been a lot of dead bodies dropping off the mountain.

Better safe than sorry.

shark- i guarantee the market will go back up...i would even bet my entire portfolio on it ;)

hope you used protection...

Teamonfuego -

"i'm watching the TED spread with an eagle eye. it was down almost 10% today, which is a good sign. "

Sorry I'm slow here. Can you explain why it is a good sign?

Short sell ban - That's what I'd do if I wanted to take the market down instantly and scare the hell out of everybody.... That's why they did it? I'm thinking yes.

"Edmund Hillary went up, but so did Rob Hall."

LOL, beautiful...Hall also ascended successfully several times before his death, and if i can duplicate that feat, i'll die happy ;)

CP- agree...finance ministers are not naive...the ban on short sales deflected public attention/blame away from the Fed, while simultaneously setting the buy of a lifetime for HB&B...

setting UP..

The TED spread is an indicator of perceived credit risk in the general economy.

http://tinyurl.com/5gkmgd

One of the few charts that looks like it's building strength to move to the upside, CEF (Amex):

http://tinyurl.com/3sr3fp

can't recall seeing RSI-7s on the 'NDQ ten' simultaneously at these levels:

http://tinyurl.com/3yvzkg

needless to day, we dropped lower yet on the $BPNYA:

http://tinyurl.com/5nxymn

2nd and CP-good points...didn't think of that.

C3:

TED spread is the difference between Treasuries (supposedly riskless) and LIBOR(riskier). It's a "universal" measure of financial system stress/health/risk. Think of the spread as the cost of an insurance policy. The bigger the spread the more costly the insurance policy, the higher the perceived risk. The spread coming down supposedly means some of the risk came out of the financial markets. Having said that, LIBOR is supposedly prone to manipulation, the explanation of which is beyond my current ken. So, it might be good.

I would actually love to climb Everest myself, but considering I often have trouble climbing the stairs, it's probably not for me:)

As for protection, I use thermal underwear, insulated gloves and goggles. What do you use?

well, OK...in that case i have to admit i don't know much about roman orgies...

just putting this out there- Act IV is certainly not out of the picture; the curtain may even rise before we're finished chatting in the aisles...

Ok, heres proof of my densa standing....could anyone explain the import of the margin change mentioned by bobj at October 7, 2008 11:26 AM post.
TIA

2nd: for Act IV I write thee a poem. Not very good only a first pass, but I was playing in the sun under a water fall and these were my thoughts about today.

As stocks tumble
Chains rattle .
Pulling into sight
machinery to power massive bailouts
kicking about smoke and show
happening boldly
as the day tomorrow is saved...
The sun coming up
Hope abounding as ruler smile
fixing liberties
in new laws and acts
re-chain more tightly
in fractal fractional paper reserve magic
an illusion of everything fixed
in our wonderful new paper castles
of folded 750 billion dollars

Be careful, be aware.
Watch not magicians in this show.
Leave the audience
Empty the wallet
of paper dragons
Otherwise to discover
chains being rattled
the final ones
placed upon our very own feet

so it goes the last stanza sucks, perhaps we have some budding poets in the crowd to edit this :)

The SHOW MUST GO ON!

I think tomorrow will be a very very good show indeed.

:)

Previous and on [22 Sep 08], Bill said:-

"Early today, traders in Asia-Pacific markets, as well as in commodities and forex, were getting it right: higher equity prices, higher commodity prices and a weaker USD. But as the day begins the US interventionists are trying to put a damper on things until their legislation is approved. Then watch this Bull roar."

Legislation was passed and since then market is down 15%. No trader likes to see that kind of drop!

Photogray

Margin is like your downpayment on a house. They're raising the downpayment, thus reducing the amount of leverage per contract, which reduces the # and value of contracts a given amount of money can buy.

BBeukes:

You forgot the part where he said the rest of the world would have to come to the bail-out table. We're not quite there yet.

the Bull will roar, and it won't be some 500 pt yawn...nor will it occur on anyone's timetable-> can't quite come up with what was missing this morning, although it was clear there were too many bottom callers...today's negative close, however, provides a better set-up...

Nemo -

Thank you for the explanation. What TED # is consider "healthy"? Do you know where can I find TED spread real time? Thx.

Photogray re: margin
My take is that if you have highly margined positions at IB, they are reducing the amount you can margin to (protect themselves and) you. With the volatility in the currency markets and the leverage available, it appears that "blowing up" could be a distinct possibility for someone positioned the wrong direction. IB has made it a little bit harder by reducing the leverage available.

Casey- smoke, chains, illusion, magic, magicians, smiles...we all love a good show...brings to mind Robert Conrad slipping inside the door to take care of business with attention diverted to Ross Martin's brilliant illusions...what a show that was, the Wild, Wild West-> "The Night of the Kochmer Illusion"...

C3 - Normal TED spread would be under 1, now over 3.5. The lower the better. Personally, I would expect to see a sharp drop just prior to the market recovery we're anticipating.

http://tinyurl.com/5gkmgd

shark - Tin foil provides good protection for some, or perhaps a large potato in the posterior area of your Speedos under certain circumstances. Unless absconded from an earthwalker, I'm unconvinced gloves, hat and coat would be sufficient...

Jim Sinclair's post this evening is worth posting here:

"Things are out of control.

The draconian action taken by the Federal Reserve today was their entry into locked credit markets that are defined by the Libor Rate and Rate on Commercial Paper. This action prevented the triggering of a total implosion of all markets, with the exception of gold, the currency of ultimate final refuge.

"Out of Control" can be defined as a day the Dow crashes 500 points when the Chairman of the Federal Reserve and the President of the United States spoke on national TV, right on the heels of the much touted Bailout Bill, combined with the entrance of the Fed into the OTC derivative business with no binding limits set on the high side of this initiative.

This is a downward spiral in which now four major interventions have failed.

The only case study in History is the Weimar experience. You cannot compare this to the credit lockup of Livermore and JP Morgan times. Arguments against that point are hollow.

What I find inexplicable is that the "Uptick Rule for Short Selling" has not been reinstated. That rule is more powerful than even banning short selling. These people are not STUPID so one can only assume this "Out of Control" situation is not a surprise.

Do not be surprised by additional intervention failures, gold taking out $1000 on the 3rd try, three consecutive TIC reports failing to support the Trade Deficit, a Federal budget deficit of unprecedented proportions, a dollar trading at .72, .62 and .52 and gold trading at and above $1650.

I told you in the middle of the recent dismal state of mind many gold investors were in that I never felt better about gold. That may have sounded nuts to some of you.

I now say that I have never felt more confident about gold and silver juniors with good property, good management and money in the bank."

2nd: :) I so loved the wild wild west... Where is Robert Conrad when we need him most!

Are you talking about the magician episode with the philosopher stone? That was my favorite episode if so!

I would such as a super villian the current crowd running the show out do any we find in shows and movies sadly as we find our wallets empty.

At least I am happier poor :) living under my waterfall

I rewrote the poem but stashed it away, i will enjoy tommorows show instead

sorry mistyped that one sentence

Sadly the current crowd running our show out performs any villain we find in shows and movies as we find our wallets empty.

dr. cosa,

My studies show that Fortuna has money in the bank and good management. Any others care to share juniors that fit all three of Mr. Sinclair's categories?

Goldman Sachs after the success of the Paulson bailout vote, per Roubini today (Oct 7):

Goldman Sachs, Morgan Stanley, the other primary dealers and the banks that have access to the TSLF and PDCF (and discount window) have massively used these facilities in the last few weeks; but they are hoarding such liquidity and not relending it to other banks...

Nemo,

Remember I told you about an awesome 80's metal band that moved to NYC found a new singer and made it big?

http://www.youtube.com/watch?v=GnQ7mWWi7Gs

For all of you who forgot how to rock

ChickenPookie -

thanks for the info! I'll be watching from now on!

"The clock is ticking, and it's one minute to midnight"

Actually, it's about ten to.... but hey.

because it's midnight.

http://www.youtube.com/watch?v=Z9kt9NRfoeM&feature=related

Moab,

Thanks for posting that itulip article. Sounds like they are seeing the CDS market dropping off a cliff next which means still selling all other assets and buying gold on this dollar bounce as they mentioned at the end.

I saw it on http://traderfeed.blogspot.com/

"A quick scan of data suggests that slightly over half of all NYSE-listed stocks made fresh 52-week lows on Monday, continuing the expansion of weakness described in the recent indicator update. Such broad weakness is not common. Indeed, since 1965, I could only find six trading days (out of nearly 11,000) in which more than 50% of all NYSE stocks made new annual lows. These days were:

* May 21, 25, and 26, 1970
* October 19, 20, 1987
* August 29, 1966

The S&P 500 Index ($SPX) was higher one year later after each of those occasions, rising over the next 250 days by an average of 32%. The clustering of the above occasions, however, suggests that--in the short run--very weak markets can get even weaker before reversing.

Broadening out the search, we've had 41 occasions since 1965 in which 30% or more of NYSE issues made fresh 52-week lows. After 250 days, the S&P 500 Index was higher 34 times and lower 7, for an average gain of 18.7%. Interestingly, the losing occasions occurred in June/July, 1969; and March, May, and December, 1973. Each of these occurred roughly one year after important bull market highs on the way to important bear lows in 1970 and 1974. A careful look at each of these occasions suggests that the vigor of the rally following the very weak market days has tended to separate the longer-term buying opportunities from bounces that ultimately produced significant new price lows. When markets have been historically weak and even then cannot generate sustained buying from value-oriented participants, they have gotten much weaker over the next year."

I'm not that well versed with the markets in 70's, so I'm going to ask a question here. Are we a la 1970 or 1973 at this point? Some people compare now to 1974 low, but again not sure. Anyone? Bill?

This is more a death metal market than hair band.

http://www.youtube.com/watch?v=SAGOZq_eE2Y

Scandinavia moves to bolster confidence in banks
"The Danish banking sector is very solid and is not part of the problem but part of the solution,"

"Big Scandinavian banks are very, very far from a solvency situation, it's more the liquidity of the system which is the problem. So if you can calm the public, you certainly score a big point there," the analyst added.

http://tinyurl.com/4t26cg

Denmark has "unlimited guarantees."

Eight Danish Stocks to Add to Your Portfolio
http://tinyurl.com/4clzug

Of the 2 I could bring up stats for, both are trading at 52 week lows.

If they're not part of the solution, what are they?

The Big Bicture says the Fed already cut rates yesterday... which answers Vinod's question.

http://tinyurl.com/4uwb3l

The central bank used power granted under last week's financial-rescue legislation to effectively set a floor under its main interest rate that's lower than the 2 percent target set by policy makers last month. The Fed may now pay interest on bank reserves while it floods financial markets with liquidity, pushing down the overnight lending rate by about 0.75 percentage point to 1.25 percent.

"Absolutely, it's a stealth easing,'' said John Ryding, founder and chief economist of RDQ Economics LLC in New York and a former Fed researcher.

Waiting for my 1000+ up day in TSX to come shortly... but things seem to be going in slow mo with no conviction, and most stocks seem to be following the same chart pattern.

deep freeze.

"If they're not part of the solution, what are they?"

As a chemistry major, I've always said that if you're not part of the solution, you're part of the precipitate. Ba-dum-bum.

Japan down the most since oct '87

Global stock selloff accelerates.

Kaimu, I've been wondering...What do you think of Anooraq Resources these days?

British planning to inject 45 billion pounds into system this morning

ALOHA !!

Looks like one the US Banks that will survive is right here in my own backyard! BANK OF HAWAII(BOH;NYSE) ... I can attest the real estate boom was not nearly as BIG here as in the other USA hot zones. Plus Hawaii has always had exposure to Asia and there has always been demand for Hawaii property not only from the USA side but from Asia side, which I still believe will give Hawaii real estate an edge over the rest of the USA.

So while C and MS and BAC are struggling to stay above $10 or $15 a share BOH is still maintaining share price levels above $47 per share which is where its share price has been since 2005! No writedowns either ... EPS 3.97 and P/E 12.6!

When I was in the bank a few weeks ago they had signs up showing that some sort of Bank Survey indicated BOH was one of the top five safest banks in America.

I am not suggesting BOH as a trade but just pointing out the difference between NYC banks and regional banks that are well managed. Obviously the NYC banks do not understand risk. Why should they when they know they get "bailed out" for all their mistakes, whereas BOH is not an "insider"! Look at the difference! TOO BIG TO FAIL ... the arrogance is just unbelievable! For that reason we will never see any BOH insiders running the US TREASURY!

ALOHA !!

ANOORAQ - I still believe in ANO/ARQ because of their deposit size some 62mil ounces of PGEs, including Rhodium. I have not followed them lately but they are in South Africa and that isn't exactly the best place to be doing business. Aside from infrastructure and power issues there is the government which is looking to be more and more corrupt and will lean on the mining industry more and more to pull them through the hard times. Yet, like most governments, the USA at the top of the list, they tend to bite the hand that feeds them in their egotist power plays!

I still say that Western Australia is the best mining region in the World with a VERY supportive government and untold resource wealth. Such wealth will be much more sustainable in the long term compared to fraud exporting and paper shuffling that the USA and UK specialize in.

The ASX is on sale to US Peso holders ...

I do not own any Anooraq shares. I used to ...

Thanks for the heads up flower man. Aloha.

[Bill Cara note:

Valgold (TSX.V:VAL) has just announced they have quit Guyana.]

Hey Bill.

Asia selling off hard, Dow futures down 225. Clearly the picture has changed in the past few days, no? We seem to be facing what appears to be a total systematic banking failure worldwide. Am I too far off the mark?

anyone watching the overseas Asian markets here? Japan is getting slaughtered...

ALOHA !!

In JAN 2008 I was in Sydney, Australia and met with the COO of CITIGOLD-CTO:ASX, Mr. Chris Towsey. He met me at my hotel, the Siebel Pier One right next to the Sydney Harbor bridge. It was a beautiful day and we sat out on the patio deck for lunch at the hotel restaurant. We talked for nearly two hours and I can say he was a very knowledgeable geologist and manager and CTO are sitting on some very impressive grades.

Before we ended our visit we spoke briefly about the future of the industry and the general course of economics and money. I told him that I believed the USA was headed for a monetary crisis and that the failure of major US Banks would be the catalyst to bring about the collapse of the US Peso. He asked me what US Banks I thought would collapse. I told him two investment banks ... MER and LEH and then I told him an icon would collapse before the end of 2008 or the first quarter of 2009 ... BAC! He was shocked ... and he made a smirk like he thought I was crazy! He said ... "All three are American icons mate!" Well here it is some nine months later and I got an e-mail from him tonight and he said my calls on the US Banks collapsing were amazing and that BAC is definitely on the list! He told me I should consider buying the ASX while the USDX was still in high gear. I will ...

Well, now BAC is on the ropes. The BAC CEO Lewis who was hailed as the Wall Street Golden Boy a couple weeks ago for taking over MER is now looking like just another overpaid Wall Street Golden Turd! Its so bad they jumped on the chance to cut dividends in half! CountryWide and MER cost them close to $60bil! While MER says it has $1tril in assets I am not sure how BAC would know that since they barely had a day or two for due diligence! What are MERs liabilities? Then BAC is one of the largest derivatives holders in the World and I am sure has exposure to AIG CDS crap ... Today(10/7)BAC share price went down 30%. The pension funds and 401ks and mutuals and hedges that depend on the BAC dividend just got 50% poorer! The question to these shareholders is ... DO WE HOLD LIKE WE DID WITH MER AND LEH AND BSC AND WM AND FNM AND FRE AND FOLLOW BAC DOWN OR DO WE GET OUT WHILE THE GETTINGS GOOD? I have to say the precedent for holding US Bank shares is clearly abysmal and I am sure the prior losses for holding are weighing heavily. So $2tril in losses for retirement portfolios and still growing. WHATEVER!! Well, I never ever had plans of ever retiring any way! Looks like a lot of other baby-boomers will be in that same boat!

WELCOME TO WALMART ... I LOVE YOU!!!!

Excellent...thats what we need... a hard press down and then waiting for a sharp reversal, if it happens. Sticking with the trend ...

Sergio yep I am watching Asia...

quite the show right now. Even revised my poem again :) to reflect upon this time. I wonder if we are watching history in the making and which way this will be spin...

Oh well matters not, dice have been tossed and fate will choose in the morning. I find fate tastes better with tea and a smile, even when snake eyes or box cars tumble down.

Bill do you sleep? Hmmm Bill where did you see the valgold news item?

Kaimu:

the lucky ones will be working at walmart after it plays out sadly... this is only warm up show for a few years down the line in my opinion.

ALOHA !!

WOW ... Japan down some 10%!!!

LIABILITIES anyone? Globalized fraud begets massive globalized liabilities ... Barbarous relic where are you? Asia knows GOLD ... Asia knows SILVER!!

This has got to be the most interesting thing to watch unfold - To watch markets come apart at the seams that is - reading headlines dating lows to 2003/2004 and earlier - it's incredible - I don't even know where to look for support any more on the charts - for example DELL - maybe it will catch support from the 08/97-01/98 consolidation - ~10$ - going back 10yrs!! WOW...

fugly
1. adjective [slang] ”肥胖而且丑陋”(大学生用语)

http://tinyurl.com/457ynt

Support in AUDUSD=X looks to be around $0.50.

Kaimu, please tell me I'm wrong here.

http://tinyurl.com/42b7cy

AUD is dropping like a bird in Australia.

Maoxian has a bronze (3rd place finish) Fibonacci retracement of Dow 5903.

http://tinyurl.com/3f2y4c

XIU looks like it will either break through critical support tomorrow or bounce. (Cramer 50/50 rule)

Yahoo really needs to extend their charts past 1999.

I knew my earlier poem was bad, but i didn't think it would cause Asia to tank. :) seesh!

critics are harsh now a days

kaimu,
Thanks for your series of excellent posts. Particularly enjoyed the SNL skit ROFLMAO. The proposed legislation in Canada re: "terrorists" and gold scares me. Taking away folks last place to hide. I'm sure we will see the same in the U.S. As the late George Carlin said in his "America is Tyranny" clip...they want it all!
MCM

OT: Pat Metheny Group - Third wind

In 1985, I sat directly 5 feet unobstructed in front of Metheny at Gabby's Place Waikiki and watch him and the band play for 2 hours. my favorite jazz fusion.

http://ca.youtube.com/watch?v=MwAiQ5JsO_4

Gold back above $900 in the spot market.

My S&P cash target is 963.84. Looks like we will hit some time this morning. Decision time coming.

footsie & daxie down 6 - 7%, Swedish OMX "only" - 5%.

STO down - 6.66% in Norway. Does that have some hidden meaning? ;-)

Things are happening fast in Iceland, perhaps how all that turns out will be an indication of what to expect elsewhere - or not?

Riksbank pumping money into Icelandic Kaupthing's Swedish branch, may have to "take it over".

Gold at new high for the year in SEK, now over the pyschological SEK 200:-/g.

Anyone even consider the possibility that this might just continue for a good long while?

And that there might not be a great rally when "the bottom" is finally hit?

That there might be one of those boring "L" bottoms?

The Rand is down 50% in 2 months!

My last South African property fell out of escrow 2 months ago ... as property transfers easily take 2-3 months to complete, I would have repatriated all of the proceeds and taken a
buzz cut.

I am just relieved I paid R 6.3 per dollar on my last wire transfer out of RSA.

If I can survive today in the market, I think now may be an excellent time to re-enter GFI, up nicely in pre-market.

The Icelanders must have stepped on some toes during their buying spree, otherwise it is unfathomable how their political allies including the USA, were prepared to throw them under the bus. Is this an early example of crass favouritism by the court of King Henry?

I always expected the South Africans to sell out ultimately to the Chinese ... maybe it will be the Russians. Both countries appreciate the value of the gold in the ground and how to mobilize the diggers!

Expectimg massive crash in next 2-3 three days. Have taken bath with junior miners and am now in core miners and cef & gtu + cash. Meanwhile as monetary authorities fiddle and Mac & Obama don't have a clue, this board is only place that has something of a handle on whats what.
Thanks to Bill & all

wavesmash, thanks for the AUD link. If you wish to track other currencies in Yahoo, enter the symbols followed by =X.

USDCAD=X -> USD to CAD

AUDCAD=X -> AUD to CAD

EURCAD=X -> Euro to CAD

My favorite Italian blogger (www.cobraf.com) points out that in the last 2 weeks there is only one (!!!) share in the SP500 with a positive return: CPB. It makes soup: maybe making soups (at home) is the only salvation now?!?

I went long again about 10 days ago, not only because Bill thought it was right, but I was convinced that the government helps (in every country) could turn the markets. And since I do not daytrade (and I didn't asses risk well for that) now I have lost a lot (ok just virtually, but when I start selling, it will be quite real!). Not to mention some positions I have in junior miners (oh my God, Valgold too!).
This is an extraordinary time: even the system of RSI7d/w/m (it is great, I admit with no irony) gives now wrong result. The losses are so massive that the system reset every day. But from the first accumulation/buy signals many stocks are now -30/-50%, not different from general indexes such as SP500. So, now? Today I'll make a decision if it's time for me to join the panic, and keep just my gold (senior) stocks, or maybe even buying them all with what is left after closing the big losses of the other positions I have. Shark... you were right! But I didn't intend to daytrade, just to enter long for a long while. Anyway, I want to thank Bill, first, and all the people of the community, because I learnt more here in the last 2 years, than every other part of my life (at least for economy!). And this was really an "exciting" period. Unfortunately I was the wrong side...

I'm a "CEO" of a very small company. We still do not see a big economic crisis, except for the poor wages (after the high inflation). So, if the economy also worsen, I do not know what to expect from the markets! The big worry now is anyway that people is taking out some money from the banks, and some companies I know (not mine for now) have problems because banks are cutting credits. So, if there is not a quick reaction of the governments (and QUICK is something difficult for politics) the real economy will suffer a lot. Or maybe is it just a sign? We should build tomorrow's economy with no debt. Let's prepare the hoe...

RATE cut 1/2 point.

Dow futures were down -304

Now they are up 50!

Rally time today?

Boss,
it better be good, for a moment this morning I panicked and thought Bill was wrong and Cramer was right.

[Bill Cara note:

Bill is often wrong, but not this time. Gold and silver will soar now and the Death of the Bear will finally become obvious.]

Coordinated rate cuts, per Marketwatch:

LONDON (MarketWatch) -- The Federal Reserve, the Bank of England, the European Central Bank and other major central banks cut interest rates Wednesday in a coordinated move to head off a major global slump. The Federal Reserve cut its key lending rate a half-point to 1.5%, while the ECB cut its key rate a half point to 3.75%. The Bank of England also cut its key rate by a half point to 4.5%.

glad i didn't decide to give up & go short last night...

Well, well, well. The Eurozone did cut its rates after all.

$NAA50R was 5.63, % of Naz stocks trading above 50 dma.

$SPXA50R was 2.4.

Figures are available after the close.

central banks had to do a "firebreak".

I think we could see some bumping around for the next couple weeks.

European stocks turned north on a dime after the Bank announcements.

Oh, this rate cut hangover is going to be painful.

2nd,

"Americans' retirement plans have lost as much as $2 trillion in the past 15 months -- about 20 percent of their value -- Congress' top budget analyst estimated Tuesday as lawmakers began investigating how turmoil in the financial industry is whittling away workers' nest eggs."

Only if they are close to retiring should this be a major concern.

But it does make for attention getting news coverage.

I understand many of those in 401(k) had little option to pull out, but unless the company matches contributions no one should be there.

wavesmash,

Well, you may be right. To me all of the teasers you listed seem so absolutely dumb I would never consider any of them. Like most, I've had the African chance at the brass ring, the offers of no money down, etc., but have always paid cash, use a credit card for convenience and to take advantage of the float. The last time I paid anyone interest it was on my first house which I paid off quickly.

I do have this quote above my desk, so I guess I shouldn't doubt this ssituation.

"No one, in this world, as far as I know, has ever lost money underestimating the intellligence of the great masses of plain people." H.L. Menchen, 1926

On the other hand, if I were one of those 1 in 416 in default, I would simply push for a better deal from the mortgage holder. They don't want the house — you can bet on that.

I beat city hall twice on real estate taxes, and insurance company who wanted to pay only 80% and countless clients who tried to stiff me on my invoices for work I did.

When credit card company approached me a few years ago I told him, "I see no reason to pay a percentage to you for work that I did."

He said, "You can't say that!"

"The hell I can't — didn't you just hear me?"

People need to take charge of their lives and quit begging from the government. No wonder Big Brother is gaining control of us!

Thanks for the info.

RIMM UP.....$5.50

SV