Good luck to all- today looks like it's going to be rough. May try to ride DXD or QID for a few bucks, then try some knife catching if we go low enough (7k or lower?)

MCM

From last night's news letter. Looks like he nailed it again.

~~~~~~~~~~~~~
The Symmetrical Triangle pattern convinces us that there is a 2,000 point move coming,
starting now, or at most by early next week. Question is, which direction. We know it will be a fast 2,000 point move in the Industrials because the breakout should be at least equal to the widest leg of the triangle, wave {a} up, which was just over 1,900 points. The textbook on this pattern suggests a 90 percent probability the breakout will be down, a crash.

If prices are about to breakout below the triangle, then Thursday’s price action was at least part of wave {e}’s final move to complete the wave 4 triangle. A decisive break below the bottom boundary would confirm the worst
case scenario, that an approximate 2,000 point plunge is imminent.

While we are intensely focused on this dangerous potential the triangle wave 4 scenario presents,
we need to point out that once the subsequent wave 5 completes, perhaps in the 6,000’s, a huge
dramatic rally will follow, wave b-up. It should last several months and be an excellent opportunity to go long.

A message for the Wizard:

It looks more and more as though I was right and you were wrong weeks ago when I wrote that what we're looking at here is not a new bull market, but rather, a total systematic collapse of the financial system. But because I disagreed with your rosy scenario I was labeled a fear monger. Then, when my mom got sick and everyone here offered their best wishes, what did I hear from you? Nothing. Despite the thousands of posts I've made which were both more correct than either yours or Vadym's overall and were done at my own expense and for no material gain, you built your business on the back of good information such as I provided but offered not even one word of hope when my mom got sick and when my chips were down.

Mr. Wizard...Now that we've seen behind the curtain and realize that you're just like us, not a wizard but just a man, pulling levers and talking through a blowhorn, wouldn't it be nice to straighten out the record and get on with things?

And Vadym...God knows I love you man and one day we may tip some Stoli together, and you may also be the best scalper the world has ever seen, but obviously your take on the big picture is, like the Wizard's, not fully comprehensive. I wonder...Are you still spitting coffee all over your keyboard laughing at my dire predictions?

Now I know what you both are thinking. Why doesn't this Shark guy just natter off and leave us alone if he's so unhappy? Well, I've thought long and hard about doing just that but that would be too easy. Let's see how much of a dedication you guys really have to "social equity", which, in my interpretation implies freedom of expression. This is your blog, that's absolutely true. But I will express myself here, and will feel emboldened to do so by the accuracy of my predictions. It's not ownership that makes the rules anymore. This world, and this blog is too far off the rails to adhere to that antiquated notion. It's a game of being right. Whoever's right really "owns" this blog anyway, whatever you may think. And I will not just natter off and disappear because it would be convenient for you. I will post, and as long as my predictions continue to be born out in fact, who's to say that I don't add more value here than either of you?

And Bill, it would be nice to finally hear that you hope my mom gets better. If it were your loved one and you told us about it, do you not think that I would offer my best wishes/condolences? That's really what's bothering me. I never lost a dime based on your bull market call because I didn't believe you. But I do promise to keep things productive and civil, whether from here, or from a library, as shark_attack or under some other moniker, and to post as long as I continue to be pretty much the only guy with a firm grasp of reality.

Enjoy the wine tasting.

Bill Cara note:

Sharkie, don’t insult me. It’s probably time for you to move on to your own blog. In the past because of your insults to others, I have warned you, and banned you, and you pleaded for my indulgence. I acquiesced and for the most part your contributions have been positive ones. But your remark here is over the top and shows me you are too much a piece of work for me to manage.

So, this is a Message to Shark Attack: until you contact me and we resolve your problems once and for all, you will not be returning to these pages under your present or any other monicker (we know you sharkie in whatever clothes you are wearing).

For the record; it was 26 minutes after you announced your mother’s circumstances before I sent my condolences, as the record below proves. As for reality, I think most of us understand your situation.

Enough said.

Due to a health situation concerning my mother which happened this weekend my mind is not really on trading at all. I trust your best wishes are with us as we sit by her bedside, my sister and I, 'round the clock in hospital and your prayers for her potential recovery are very welcome.

BTW...This trading dream of mine was really HER dream, years ago, when as a suburban housewife she bought all kinds of trading books
(which later formed the basis of my trading education). She never really got to the point with trading where she succeeded, but she always believed it was possible and always believed in my ability to make it happen. I remember her, with her bar charts and downloading the data each night after close of market, the way we used to do it in the old days. She means the world to me and is truly my best friend.

Thank you all very much for everything.

Posted by: shark_attack at October 20, 2008 11:20 AM [link]

Shark, you are taking part of your mother, adopting it, and incorporating it into yourself, building upon it, to accomplish that what she dreamed of. That's legacy. I don't know her stage in life, but my father has dementia at 94. We kibbutz, go outside and smoke a cigar. Next day he hardly remembers, but what's important is that I do. Best wishes.

[Bill Cara note:

Well said, westcoaster. It's the kind of thing that kept me going for the last year of my parent's lives, believing all along they would pass on the same day and that they needed me there. Good luck sharkie. The community is with you.]

Posted by: westcoaster at October 20, 2008 11:46 AM [link]

Last person to leave turn the lights out.

Here's a comparison of unemployment levels...

1929 Population - 121,767,000 (30.3M unemployed @ 24.9 (1932 level))

2007 Population - 301,139,947 (18.3M unemployed @ 6.1%) (39% difference?)

Of course, I don't think there were 2.2 million people in prison at that time, and we know that the accurate stats in the US are like governments without bailouts. Do they count as unemployed?

Good luck on the gap down and looking for a positive close (or at least something around $29 for the q's? They can't take your money all at once...

What, MS earnings didn't go well?

http://minimsft.blogspot.com/

Good luck to everyone. Red 23 yesterday. Black 24 today...

Back up the truck...

http://tinyurl.com/5sa45p

OPEC says they're cutting production by 1.5 Million bpd. Russia looks like a train-wreck slamming headlong into sovereign default. Dow futures down 550.

My cash and I are going to sit on the sidelines and listen to Tony Joe White this morning.

http://tinyurl.com/2g7aj7

BTW... that was my last post. Going bullish in Sept
turns out to be the worst move I had ever made.
Move over Tbar & number 2 son

wow, Sharkie.

Quit holding back and let the board really know how u feel.

SPY trading at ~84.00 this morning. Wow! Got my attention. Gona be an interesting day.

Hmmm....if you didn't lose anything then why the anger?

We all wish you and your Mom well Shark, but the personal attacks are uncalled for.

If you are right then isn't that satisfaction enough? Is there a need to expand or engage in criticism from there?

Good morning (if you're short). ;^)

There are NO Cara 100 Ratings Changes to report at this time.

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

"The preacher man says it’s the end of time
And the Mississippi River she’s a goin’ dry
The interest is up and the Stock Markets down
And you only get mugged
If you go down town

I live back in the woods, you see
A woman and the kids, and the dogs and me
I got a shotgun rifle and a 4-wheel drive
And a country boy can survive" - Hank Williams Jr.

http://tinyurl.com/5q4gfb

Grace under pressure.

Courage under fire.

All of this too shall pass away, including egos longing for attention.

Yep, this is one of those Kaimu naked yard run days....if it we're so chilly here.....

liquidated recent longs pre-market - except for few which are just treading and I feel comfortable holding - initiated short's for the time being...this is far from over. Minimal damage but damage nonetheless. Good luck today out there - should be interesting to say the least.

My guess is Paulson was smiling and singing in his Italian marble shower this morning.

Shark,

I really have no idea what you are talking about. I never laughed about your predictions; post you refer to had nothing to do with you.

I trade my outlook on the market in my chosen timeframe and do that successfully. proof is posted every day for anyone to see. That's all I care about as a trader.

Not going to return to this topic, I am not here for this kind of things.

[Bill Cara note:

Vad, there is no need to defend yourself. This community has already made their decision, and have written me about it. I banned sharkie a second time. Insults we don't need here. I wish him the best; but it's over.]

I admonished readers to not hallucinate they could know things that were beyond their ken a few days ago.

This is my secret.

Now its yours.

"Daily Limit" low on futures. they didnt teach us that at nyu stern. in fact they didnt teach us many useful things i could have used.

If you are thinking of buying or selling today, you might want to review the NYSE circuit breaker rules: http://www.nyse.com/press/circuit_breakers.html

Last time the circuit breakers were triggered, there were some issues processing orders. I was working at the Toronto Stock Exchange at the time and I remember the complaints.

This is not a prediction that *any* circuit breakers will be triggered today. This market is so crazy that literally anything could happen. I wouldn't be completely shocked if we ended up with a green day.

Shark,

youd think this entire experience would make you more compassionate towards others and the problems they may not wish to divulge on this board. consider that some people were silent on the issue more to do with their own difficulties and health problems they would rather not be constantly reminded of.

no one owes you their "sorry's", why not be thankful for all the people who get served your condescention that still came out to offer you kind words instead of griping about those who didnt.

I just saw a news clip from the border where Mexican immigration officials were patching holes in the border fence...

Just one thing to add, shark: as far as I remember, my only reaction on your prediction was a question asked in a good faith why don't you capitalize on your own read, and encouragement to have faith in it and make money on it. If you misread my post, well, hope this one clears things.

[Bill Cara note:

Vad; it's over. You have no need to apologize. Not everything in life works out the way we plan and hope. Stuff happens. Sharkie is stuff that will not happen here again. We will have an honest intellectual discussion, pro or con, but we will not tolerate personal insults. I posted the rules, but sharkie is too self-involved to understand that society needs some structure in order to work at all.]

Just thinking out loud....

In light of the need to recapitalize the banks, wouldn't it be good for them to kill the market and have cash flee to banks?

I think us trade price as Bill has said much time
This is once a life time event and I do not expect that every one has crystal ball

Bill expresses his opinion about market move as he sees it. And it is about commodity/currency/stock/credit market. No one expect that he will time it at all the time and in all the matter.
We learn a lot here and let make it better for next few days.
And in end we are responsible for own trading.

2nd
I lost your email address

The market has a way of humbling all participants if they stay in the game long enough.

Egos need to be checked at the door.

Just my opinion, as always.

Sharkie-I am sorry about your mother's illness, but your attack on Bill this morning is over the top, especially after what Bill has provided this community over the past 4 years. Incomprehensible is a word that comes to mind.
Mind you, you may be feeling emotions about other things at this time, your attack this morning is uncalled for.
Everyone is wrong at some point when it comes to trading. Endzone dances because you were right about the market usually comes back to haunt you.
Best wishes.

Ray

SPY - Looking at the 2003 pk low, I think the "line in the sand" will probably be between ~83 down to ~82.50. I won't anticipate anything because who knows if this is the time that all those mutual fund holders who have yet to exit will exit today at 2:00pm. The PPT has the presses rolling!

Re: Key Reversal

I figure that the XJY:XEU chart will be showing a sharp reversal soon. It should also be around the time we see the awaited capitulation, if its any indicator to go by. Lots of currencies collapsing against the Yen, some very wildly off, such as the Aussie.

stockcharts.com

Bhttp://tinyurl.com/5ka3zl

I am always posting the good stuff in the old daily discourse ...

It seems I should I have kept such colourful language to describe someone closer to home :

"Bill was right yesterday calling for a bank holiday. Unfortunately, Paulson has been shown an impotent self pleasuring tool by the Japanese."

And, yes, this is an ad hominem attack!

re "Bloody Friday," which is what the marketwatch headlines read: the futures are simply back to October 10 levels; they would need to take it down to on a relative basis, we've all been swept back about the same percentage...

if we retest the lows what is everyone buying?

for some reason, TypeKey did not post my comments correctly (deleted the middle portion?), trying again:

re "Bloody Friday," which is what the marketwatch headlines read: the futures are simply back to October 10 levels; they would need to take it down to on a relative basis, we've all been swept back about the same percentage...

How does Warren Buffet's statement on buying stocks sound today ?

OK, it must be the 'less than' symbol: they would need to take it down to less than 7800 for a panic open (IMO)...

keep in mind it's a global event; it's not just your portfolio that's losing value-> on a relative basis, we've all been swept back about the same percentage..

One of the difficulties of the written word, is it's relative innacuracies in conveying meaning. We don't see faces, we don't hear voices, we only see words of proximate accuracy limited further by the wordsmithing skills of the individual writing them.

Many times I've seen emotional pain disguised as anger. The intentions of all here are true. We all are flawed, something Bill has often said about himself.

We can only do our best. Therefore, please give some leeway in your interpretations of what is written in these pages. What you infer may not be what is implied.

QT- come on, man...it's just another day in the market...may even close green...just hang in there...

I let the board know that Bill send me email about my tooth pin
He cares

vinod- assuming your email address hasn't changed, i just forwarded a message, so you have mine...

Bill - I support your decision to ban this egotistical guy. People make good calls and bad calls. That's part of investing. This guy acts like he never made a bad call. While I feel for him for what he's going through with his mom, I didn't go posting on some random blog when my mom passed away suddenly last year looking for support while offering nothing but an egotistical view on things.

I sold most of my positions yesterday having a feeling that things would fall further. Did I post on this blog that you, Bill, were wrong in your thinking and that I am right? No, of course not. Everyone is entitled to their opinions, but there is a right way and a wrong way to express them.

not buying the headlines-> green close...

even if/when we see a massive rally today, wouldn't more forced liquidation be required in the future? It just seems to me that the forces that create the downdraft are different from anything we have seen before.
Disclosure: I am 43 yrs old so until now I did not see many of these real panic events.
Am I way off here?

2nd
will send you email this weekend
I took day off today from work and have no plan to watch market or to be at blog today
My son got new job and he is going to treat us today
have agood trading to everyone!!!

mvnni- we only need to look around us to see the "forces that create the downdraft-" it's us...

Lets just all remember the amount of people who read this blog and how it is a privaledge to post here, not a right.

2nd-putting it on the line-I like that.

I hope you are right.

GL

Ray

Sorry for this question, because as you can see it clearly shows my lack of trading knowledge.

I have noticed that Dow future doesn’t really predict market movement well, reading Bill’s book I also realized how much worse futures markets are in terms of transparency, compared to equity markets.

Shouldn’t we wait and see what really happens, before claiming today the crash day? I realize I could be totally wrong here, just want to learn.

Thanks.

[Bill Cara note:

I think holding on at this point is the wisest move. Futures markets are only reflecting the sell orders streaming into equity and commodity markets, which have stopped working as value discovery mechanisms.

Somebody sent me an article by Jon Markman titled "Bundled up for a deep credit freeze" and asked me for my take. I found it interesting, but it's backward looking. I replied,

"Markman saying 'The onslaught has begun' is a problem I have with this article. It's already late in the game and he has succumbed to an emotional crisis. My analysis is showing that on rallies, the retail accounts are selling and the institutional accounts are waiting for the sell-off, then buying. It's only a mater of time before traders see that the market is no longer functioning as a value discovery mechanism, and the selling stops." The buying will follow.]

Gotta look at some of the biggies if they come to me.

2nd is right, we will be no lower at key support than we were previously. Now if the previous low breaks down with volume.....look out...

Re: Downdraft

I believe the downdraft is caused by the action of credit derivatives and the swaps held against them as counterparties attempt to settle their obligations.

Since the bias in the market is generally to go short, then swaps will be siphoning more money from the market than usual. And since everyone is involved in credit derivatives in the financial world with 100X leverage held against just about anything, then it means the equity must be sold to raise cash in a cash poor environment.

If the obligations of credit derivatives are to be protected at all costs and not allowed to fail, then we don't have a market, we have a trap.

Still stubbornly holding meeee precioussss miners with bloodied knuckles. Given the takedown in gold and silver overnight, and the carnage in the market this morning, would have expected to see them trading much lower than they are right now. Ok maybe I'm just grasping for hope. Thoughts?

Nasdaq under the lows of the 10th, but not 3 of the 4 horsemen. just RIMM is under, AAPL, MSFT, & GOOG are up. IBM under, though... mixed.

I'll be watching DJIA 8400. & the Nasdaq retest of the monthly lows...

Let's coin this market period....I'll start... reusing circa 2003 phrase..i proclaim it "Shock & Awe"

Shock & Awe - According to its original theorists, Shock and Awe renders an adversary unwilling to resist through overwhelming displays of power.

Did the TRIN really spike up to 30 this morning or is my Scottrade acting up again?

Babybear: short answer, yes.

I'm hanging in, kinda expected we'd see a day like this before the dawn. Becoming concerned there's no bullion on shelves yet the spot price doesn't track.... Another fine example of market intervention, and we wonder why our markets make no sense? It's because these aren't our markets. Intervention, whether it's through selective regulation, plunge protection, non-disclosure, conflict of interest, etc. makes these markets. A mug's game.

Do you notice the big boys belonging to the good 'ol boys club consistently win for the well-being of all?

@Music city man

Don't worry about the miners. In 1-2 year time frame it will correct itself. Inflation is the endgame. The only risk with the majors is an absolute game changing intervention wrt gold and even then you'll be cashed out by the gov.

In terms of "how low can they go" my thought is that matters more if you're thinking of picking something up...like should you buy GG at $14 or is a $10 special coming this way...

2nd - I agree this could be the type of day to end green against all odds at the start of the day, but we have seen several failed attempts of v-reversals either daily or intraday because of too many players having to move to cash. I am just not sure it will happen today or after the weekend or even after the FED meeting & after another panic attack. In any case I do not see it happen while europe is still trading...they will not commit their money before the weekend with the US open at this point

Shark,

Way off base today, Bill can't respond everybody's personal situation... When Bill makes his call he is not telling you to buy and go all in... He gives his view and you are a different person than him...you have to evaluate your own situation.

Bill, I appreciate your efforts...what an educational experience you are providing! Please ignore the negative comments as the positive viewpoints clearly outweigh the oulier negative ones.

Thanks again Bill!

I have gone from 70% cash to 60%... has anything changed? Anybody seeing indicators of a change to reverse this thing?

All responses appreciated.

[Bill Cara note:

Sharkie says he did not see my personal response just 26 minutes after he first told us of a personal situation. I have nothing to be embarrassed about. I still told sharkie that I no longer have time for his antics, or answering the complaint mail I get because of him. He says he might try to come back under a different name. I told him that the IP addresses he has used to date are no longer acceptable and that as a leopard can't change its spots, his MO under any name would be quickly obvious. I asked him to start his own blog, as you know.]

Buying low:
The problem with most market participants is that in the current world condition, most people are not thinking about buying stocks with the cash that they have, but to maintain a liquid cash position to "survive" whatever the unknown is going forward. It is about an extended negetive period that still requires one to protect their family; shelter, food, etc. Well being first.

MCM- who's getting taken out this morning (and of course the media is doing its part; the headlines don't help)? the smart money never gets taken out, they walk off the ship with valises with the crowd waving at them...and i would imagine they're getting ready to reboard...

Nothing to be said about what's happening to the precious metals sector here, except that I presume a P/E of 12 should be a rule of thumb to go by.

Keep watching the short term yields on treasuries:

http://finance.yahoo.com/bonds

A low yield environment favours gold regardless of currency moves. That being said, bullion rallied $30 after the panic move overnight.

The psychology of the market refuses to budge on the issue of gold as a commodity, and will react when the oil complex sells off. What is necessary is to rip the guts out of the oil markets with gold as the last man standing before bullion takes on recognition as a form of currency.

I will be posting all of my equities transactions.

"because of too many players having to move to cash"

mvnni- that's why one needs to kill margin in a bear market, to avoid getting taken out...as for cash needed for daily expenses, well, that should not be in the market, right?

i can only be honest with what my instincts tell me, which is we go up into year end, and october sellers get left behind...

Selling the house.
Today we are preparing to sell our million dollar home in San Diego. I will buy a forclosure in the same area and downsize until this mess is over. If one is in the construction arena as I am, a flush cash position is the only way to protect my capital future. At 56, I can't start all over again on the other side of another recession. It is not panic, just a sound financial move.

Questrade is freezing up again - I've taken that to be a sign of retail investor hyperactivity, and the headlines this morning were certainly enough to have this retail investor worried.

Bill, it must be hard to pen your thoughtful opinions day after day, spend hours on the WIR and the myriad of your *own* ventures, and then have to come on here and play clean-up. Just a note of thanks from one poster.

Existing home sales are taking off....nice.

I signed a sales agreement yesterday on my Mom's house in So. Cal. and it's on it's way to the escrow office.

*Please* keep your fingers crossed that the pre-approved loan through BofA is funded....I can use all the help I can get.

Nibbled on more SLW.

2nd - I too think the market will be higher 2 months from now. Would today/tomorrow/next week mark the time that things can't get any worse, or are their still shoes to drop?

Hammer1 - There won't be a bell announcing the bottom, so no one knows. If you're in cash, you've done well. I'd stay in cash if you are a conservative type. No need to catch falling knives, right? I'm all in and feeling plenty of buyers remorse but sticking to my guns.

Cara 100 Update (Final):

POT - Price TTarget Lowered from $335 to $155 @ BMO

Thank you for that, Captain Obvious ;^)

You can sell XOM Nov 50 puts for 1.33. Should be like picking up free money, and yet I'm hesitating. Sheesh.

Congratulations Craig! Great news, hope it goes through quickly. One step at a time. Know what it's like brother.

QT - what newsletter are you referring to?

TIA

I see hedge fund liquidations continuing through October end.

GL to you stktrader.

I sold w/o an agent to get my price, there are buyers out there...

Sorry, make that November end.

Seems to me that there are some clear conflicts of interest in the direction of the markets today, as if it's a game where some want it up and some want it down, and both are finding hard to get their way.

Bull Hunter: I love >50% price target adjustments so late in the game! It just goes to show that the analysts don't have a clue what they're doing to begin with.

Craig,

I noticed that SLW was briefly green....you high roller !

Good luck with your new digs.

Regards

Is ABX at this point a better buy than GG to start involvement in a possible USD turnaround?

Does anybody have any objections to seeing their bank statements denominated in Yen?

Bill,

I found your April unemployment commentary interesting and for the most part I would have been in agreement then well as now. (This was before I "discovered" your site.)

Let me preface my following comments by saying that I sincerely hope your more optimistic assessment proves more accurate than mine.

I cannot accept any of the U.S. government data you quoted as anywhere close to the jobs situation. Like the mortgage fraud, where everyone gained in proportion to how much they loaned with disregard for prudence, those who prepare, release and quote these figures, also have ulterior motives for skewing to the upside while disregarding the truth.

* To keep the boss happy and keep a job
• To please the CEOs whose ads run on their network
• To keep share prices elevated
• To quell fears among their constituents

These data are based on false measures like:

The CPI (over 40% housing related — based on owner equivalent rent) It hid inflation when prices were rising hides and deflation today.

The irrational Birth/Death Index — an amazingly dumb concept.

The requirement that reports be issued by date rather upon completion — wild revisions accepted as the norm.

The definition of a job — Any work done for pay in 30 day period and you have a job. (Think baby sitting for one night.)

Eligibility to apply for unemployment benefits —in some states — must have been employed by the same employer for over one year — full time.

Job quality: As you mentioned the good jobs are permanently gone. Many people are working multiple part time jobs with no benefits — many at an age which formerly was the peak earning years.

Most numbers oriented people disregard anecdotal evidence, but this is difficult to do if you know a large number of people whose lives have been turned inside out. It is, IMO, more important than the latest poll or monthly GDP, CPI, ISM or other means to dodge reality.

Bill...we again thank for you passion,wisdom and patience.

We here in the Cara community are here to learn and help each other master this wild market..

During this process we will sometimes win and sometimes lose this is the nature of the beast

These are interesting times which Bill and we the Cara Community have never experienced before..

We are here to grow as a community and learn from Bill and eachother

When we are in pain be it family or financial loss talking is the best remedy..but please! lets talk to each other with respect.

SV

Dow going redder.

Hammer1-another blog I read, he says the internals are atrocious and he is shorting this market, and he has yet to short the market so far...not that he will be right....just saying

Anyone shorting banks? If so what areas, look better?

As you know with 20xleverage even a 5% loss on your loan portfolio is equal to 100% of your capital base.

I see this as a stable way to offset downside risk in your longs, and am surprised nobody here is talking about this...still a long way to bleed these banking problems out...

Is it true that margin selling stops at 3:00 p.m. ?
Per a guest commentator, that it the case. I might have not heard what he said correctly.

Thank You Seamus. I knew you would understand!
Forced to take it one step at a time in this crazy environment. (big sigh...)

I feel very lucky to have a motivated first time home buyer (getting a deal w/o an agent).

I'm looking forward to less stress.....LOL!

Also big Thanks to BH. No new digs for me but selling mom's house is the last step in getting her securely situated in assisted living.

And...Thank you Bill for illustrating every once in awhile how to properly look at returns on RE.
Even paid for, mom's home can be more productive in another form than it could as a rental.

Thank you for your reply, Bill.

Thank you too, Vinod.

Chrysler cutting a 4th of its salaried workers.

Sharkie:

Wish you the best of luck with your family. This whole group is challenged with aging loved ones and being glued to a stock trading site doesn't exactly promote fleshing problems out with one another.

Considering your contributions to this blog, over the top occasionally but I always enjoyed/learned from your posts.

Enjoy the woodshed and thanks for all.

dbear here,
I'm new to the community. In the market since 2006. sitting on cash and inherited USB stock (yikes!).

An eager student wanting to build a solid financial future for myself and my family. This is a challenge!

Grym: Just be careful ie: anecdotal evidence.

A mouse sticking his head out of his mouse hole to find his field on fire thinks the entire world is on fire....

Craig:

That is his whole world

is the lack of appearances of Paulsen on the news a good thing? seems like he'd be out jabbering if he was scared.....

Craig,

Sorry, misread your post(DENSA ya know) but good luck anyway.

Buying any CNSL today?

Regards

QT,
Thanks for the link and aside about your foray into shorting the Russel and NASDAQ, BTW:
Noted depression-era short seller Jesse Livermore shorted himself with a bullet to the head ... in 1940. He left an estate worth less than $10,000 and a note to his wife: "My life has been a failure."
I appreciate McHugh's outlook, very bearish near term but at this stage of the market not outrageously so. Crowds tend to adopt a pack mentality when threatened.......

Anyone dabbling in ABX/GG ?

BH: CNSL have a half position, but my greed has me looking lower. Sure would like that $8.25 low....:>) But, I do need to add and I'm waiting for a real panic.
Have some stink bids on XOM and GE too.

Norm, is that act locally, think globally? LOL!

@Dave

No. At this point I have no idea how big the liquidation needs to be by the hedgies, so I'd rather wait for a waterfall down. There is value everywhere, but you have an auction with very few bidders.

I guess the question I put out there is, who are the large buyers and how are they funded?

Dave Hyde,

I dabbled in them, when they were about $9 per mor expensive than today ;-)

Craig,
Look to Wells Fargo if you have a problem. They are loaning. My broker that I have used for the last two houses emailed me with fixed @ 5.50% on 630K with 1 point. My new loan if I get a forclosure in the 500K range would be a 300K loan; pocket some big cash for safety.

the tape is NOT acting like a panic.

In defense of Sharkie:

First off, Bill, I don't think any part of your decision should be based on the mail you receive about Shark - I could have easily written you emails that praised shark at one point or another but did not feel it necessary). It should be 100% because you have a problem with him, and that problem should not be at all based on differing opinions on the market.

Yes he acted as though he were off his meds, but he is in a terrible place with his Mom's situation and the markets being what they are.

Secondly, sometimes its worth the effort to keep a person in the community. I've lurked here for years, and recently started posting. Shark_attack has provided an important counterpoint to your positions. He also weighs in on other people's posts which makes the blog better.

Yes he is a bit of a self promoter, but so are you Bill (and so are most of us - I personally don't see anything wrong with giving ourselves a pat on the back from time to time, especially if we are among the regular contributors).

It is your blog Bill, and without any discourse your posts would be incredibly valuable. But what separates your blog from every other one is the sense of community and the discourse. Shark_attack adds to this discourse a vast majority of the time. You recently said "for me the debate about the bull market is over" (paraphrasing), but what is a discourse if not a debate. How would this discourse read if everyone agreed about everything?

While it is easy to "ban" someone on a blog the high road in this case (IMO) would be to work with Shark_attack and give him another chance. He doesn't use profanity. His posts are always relevant and often insightful, and because he is such a large contributor I think he deserves a "by" (again IMHO).

Shark,

I'll miss your market musings. You were dead on with your recent calls and I won't forget your amazing Gold skyrocket call before the last huge run up to $1000+.

If you take to heart Bill's idea of starting your own blog, I'd read it.

That said, man, you've gotta work on your social skills. You don't go to a party and take a dump on the host's living room floor without repercussions.

All the best to you and your family.

Regards

Excuse me: global recession? I thought I saw that headline last month...

Thank you Stktrader, if we run into trouble I'll need that info.

Mom's place is in the west end of the SFV, so not quite in your range, but after paying her heloc will put $325,000 to work for her.

Not a bad time to get some cash....

This see-sawing's going to continue until HB&B loses their milk money, then we'll be off to the races.

Bill has stated numerous times that he doesn't espouse the messages being put forth from the doom and gloomers like Roubini, Feldstein, etc.

Also, Bill has stated previously that this is a financial crisis, not an economic one.

Well, I think it's both. It is entirely possible that many market participants did not properly factor in the severe economic weakness that is still forthcoming in '09, and that it is now being reflected in stock prices.

Some are saying that this decline represents forced liquidation from hedge funds and the like. Well, if prices were really such a great bargain, then the money from the sidelines would come in and absorb all those being forced to sell.

Are there stocks that represent good long term value and can now be bought ? Absolutely, but you better be patient, and have a long term time horizon.

This current time in the stock market reminds me of the real estate market back in late 2006/early 2007. There were MANY who proclaimed that the worst of the decline was over and that housing prices had certainly bottomed.

We now know that the RE market had a lot further to fall. I'm not smart enough to know how much further the stock market can fall, but I don't think one needs to rush out and just buy stocks across the board for fear of missing the opportunity.

We're certainly closer to the bottom than we are the top, but folks buying should understand that a market stabilization and turnaround could take considerably longer than what many expect.

Just my opinion, as always.

I'd call today's action:

"This sucks but I'm not giving up." Capitulation brings volume. Today? Not so much.

I have a few questions -

How many have made money (overall) over the past month?
How did you do it (long/short)?
Have you booked those profits?
What were your original intentions regarding holding period (day/swing/long-term, etc.)?

I am just curious...not trying to make any kind of statement or comment...

"Is it true that margin selling stops at 3:00 p.m. ?
Per a guest commentator, that it the case. I might have not heard what he said correctly."

No, last time I had a force selling, it happened at 15:35.

There's quiet buying going on right now under the cover of fear.

How about the testing of 800 on the S&P 500 from 2003...putting in a double bottom...then onward and upward from there? Just a point of view...

It seems there would be some major support there since the hedge funds probably piled in at that point last time...reversing the last bear.

Maybe we should look at what prices our holdings were back in 2003, while considering the fundamentals of the companies since then, to give us some perspective on the valuation they had at the last bottom...

Just an amateurish opinion I'm sure... I am looking to average down on some of my holdings.

Does this make sense to anybody?

All of the media has chicken little splashed on the headlines. OPEC is cutting oil and PBR and SU are down. Something smells like fish to me. I'm holding till #$%# freezes over.
Best wishes for your mom and you Shark.

side note today. election

http://tinyurl.com/5auag6

Has anyone seen any other news of this? I don't know if I believe it but it could be a game changer come november.

I doubt it it true, but who knows at this point.

the rules change every day.

good post by John Mugarian who's commentary I read on a regular basis: http://www.johnmugarian.com/

gotta love this quote he mentioned from Michael Moore on Larry King: "The Republicans were like invited guests to dinner for 8 years. Now they are being told to leave, and they are cashing everything in, and stealing the silverware as well."

Ron- I think you're right, but the day isn't over. It could still happpen today.
Craig- Good for you and your mom. No house to worry about and your mom where somebody will keep an eye on her. My mom fell and broke her hip while living alone. She finally got to a phone by pulling it off a table by the cord after about 2 hours. It could have been 2 days.
Bill- Thanks for this forum and all the work you put in here.

"Nothing is more important than enforcing the Constitution," he said. "The Constitution's provisions are very small for qualifying for president. One, be over 35, and he is. Two, be in the country 14 years, and he has been. Three, be a natural-born citizen. He is not."

That's right, you need to wait till after you get in office before you start bending the rules...

Until I see this on foxnews.com it isn't real. Anyway, didn't Arnie fix that rule by now?

Time for change. Spare change?

Shark - I did not know you market views but was in your camp - I did not beleive we were in a bull market as of yet and may not be for a while - that is just my opinion. I am sure there are alot smarter folks on this blog who may think differently. That is what makes America GREAT isn't it?

I believe this blog should be accepting of all opinions. I am new to the blog and do not know what has been posted in the past so I really do not know what was said.

Rob G

Craig,

Don't know what Assisted Living Center you are looking at, but I've had my Mom in an Aegis Facility(San Diego area) for the past 5 years and they have been excellent in helping her transition from Senior Living to Assisted. Always First Class care with dignity. Also, to help with expenses, if your Dad served with the military there is a program from the VA that is virtually unknown that can contribute up to ~$1200/mo!

Chief Investment Officer of Standards and Poors says to wait for SPX to hit 700, and that you usually get two chances after the market turns.

He asks: would you buy this stock at the current price?

http://nexalogic.com/stock.jpg

Hammer1 - I think it's reasonable look at it that way, but how far back do you go? Why not 10 years? How long do you think the housing market will need to recover from here, then maybe go back that same magnitude in time and pick out lows?

Re: shark
His post was ridiculous and he is likely under a lot of stress clouding his judgment.

He has one point though. Bill's call back in September caused a lot of harm to trusting and unskilled investors, who gravitated to this blog seeing Bill as anti-financial establishment person and defender of people screwed by big finance.

Furthermore, Bill encouraged more knife catching along the way.

I believe that Bill should have realized his mistake early on and reevaluated his position. From a grim macroeconomic picture, this is not another 1987 and Bill's 1987 game does not play well. From what I can see now, this is more like the 1929 play that wiped out all the people who tried to catch a bottom and concentrated wealth in very few smart players who waited for assets to turn into ashes.

My only hope now it to sell on a bear rally. In retrospect, 9/19, 10/13 and 10/20 were the bear rallies.

rob d- i day traded (mainly) the short side all year and was up 36% as of september 26...then i decided to forego my own oft-repeated advice about position sizing, dollar-cost-averaged into the broad market over the next few days, and as of last night was down about 25% YTD...

Okay, make a note....BH parties, no dookie on floor....got it! LOL!

Just a minor point about the Shark/Bill 26 minute thing. It's really easy to miss Bill's notes when they're added to a previous post. I don't have time to reread the day's post as the day progresses. I usually just start from where I last left off, thus missing any edits to previous posts.

[Bill Cara note:

I agree, but the situation came up because of problems with Typekey, then people started telling me they liked the new system. Out software platform has been in transformation to Drupal. We hope to get that done in November -- after a number of delays. The new system will allow somebody to click on my id and immediately pull up any comment I made -- all time-stamped. You will be able to do that with other participants as well. You will be able to block out the participants of your choice, which will make reading more efficient to those who choose to do so. You will be able to click on keywords and pull up all references. This will put demands on my server, but as people know, in for a dime, in for a dollar. The payback to me will be in the relatively small numbers of you who decide to use my professional services, now that we are licensed and ready to go. I will announce it asap, which will likely be Monday. Canadian accounts however will require a registered non-Canadian address (utility bills, etc) or else I will not be able to serve them. That's a quirk of securities rules and regs in Canada and the way that Interactive Brokers set up their business, which by the way I am in full agreement with. The good news is that key people who are involved in this do believe that relief is on the way for Canadian accounts that want my professional services. In the future, I shall try to get the blog writing done by 8am and then get to work on serving clients. My intra-day comments will continue.]

I don't make too many posts, and I probably don't have as much to offer as many of the "regulars" here, But I've come to think of this blog as a kind of "family." I for one am surrounded by people who are out of touch with what is happening, and this is one place where I can see that others share my concerns, and pains. I'm surrounded by people who are more interested in the latest episode of "gossip girl" or "the bachelor" or "survivor" or any of the other crap pumped through the idiot box. So it saddens me to see friction between our gracious host and any of those who have shared their experience on this blog in these historic times. I hope for peace and harmony. We are all human, and need to forgive one another. I have not lived through a more stressful time. Let's work it out and stick together...

Stock mentioned above is the inverse of EWZ (chart flipped, pick any chart). His point was, you would not sell it now either.

SiO2 - I think that means S&P won't see 700...

HNCadet - "if your Dad served with the military there is a program from the VA that is virtually unknown that can contribute up to ~$1200/mo!"

Do you know if this applies in case of divorce? I think some men have forced divorce for selfish reasons and women suffer horribly the consequences.

Jacek:

I agree that the 87 market crash couldn't be more different than this one. All the damage in 87 took place in a few days. A person could have opened up their brokerage statement at the end of October (the 24/7 internet access did not exist to stoke the anxiety) and the damage was well behind them.

This market is nothing like that and trying to create a playbook from it could be costly.

fourier123,

I miss a lot of Bill's notes, as well. Mon-Thur I'm too busy to backtrack thru previous messages.

Maybe, when the new site comes up, they'll be a way to isolate Bill's comments for easy access?

Hint, Hint.

Regards

Hopefully shark's only in the penalty box for a short time.

[Bill Cara note:

It's also a function of my time. Sorry, but I have no more to waste.]

The oil sector equity bulls have a really big problem which they've been ignoring the last 2 weeks or so - their basic commodity just keeps trending down.

What sectors are making new lows?

XLB, QQQQ, XLY and IYR, of those that I watch.

XLY is now working below the 2002 low. Have taken off most of my puts on it, even the Jan. ones, but kept a few - who can say how low it might go.

IYR is down there also, today pretending it's bottomed and is worth buying. It will probably act just like the XLY did - bounce several times with less & less oomph, and then dribble on down.
Will work thos bounces, and think it could fall a lot further eventually.

fourier123 (interesting name),

I agree about Bill's in-line comments being hard to read. If there is an EASY way to fix that, it would be great... BUT: I except absolutely nothing more from Bill because of the enormous amount of time he already spends educating us.

Re: shark_attack

His self promotion did get pretty annoying, but his insights were useful and welcomed. If he could just tone it down a notch, I think he'd be a valuable member of this community.

Re: markets

If we could close above 8500, we will have spent 3 out of 5 days this week testing that bottom, and I'd expect to see a nice rally next week.

Miners doing well despite the drop in bullion (especially silver). BA is VERY strong here. RIMM is a dog. SU is the bane of my existence :)

BILL: Did you ever get a chance to reply to my SU post a few days back? I looked around for a reply but couldn't find one.

[Bill Cara note:

If the crude oil price holds at this level -- perhaps with a 58 floor -- then SU can be bought and put away for a while. The stock represents good value, in my view.]

Guys/gals - all you have to do at the end of day is run a Edit/find: "Cara note:" A few more clicks and you will have found his real-time comments for the day. It takes only a few seconds.

Here's DOW 8500!

shark- that's exactly what happened...bill 'appended' a message to your original message (i recall reading it later that day)...

[Bill Cara note:

There are some misconceptions. Somebody just pointed out one by saying there are many who like to hear me talking about Bahamas but others who resent the implications I am living the high life. So, let me state for the record: any of you are welcome here; I will be available for anybody to meet. I have nothing to hide. My lifestyle is in fact significantly less here than most of you believe. Circumstances necessitating a change of address and the requirement that I focus all my available time to get fully licensed and building my business, I have taken a temporary one-bedroom apartment that NOBODY I know would say is upscale. Not including electric power, the rent here is $1500/month. I have no car because I have no time to drive anywhere and the $1 bus is, just like all the food stores and post office, etc, only a few steps away. The place is secure, and its on the ocean. I work at a table just off the patio where I can walk out to the beach with maybe 60 steps. In other words, I am here temporarily for convenience and, when I can get it, relaxation. I happen to have discovered I like it here because it is, like me, a low maintenance situation. There is nothing here I lack, and I'm happy. Many people I know have a monthly nut that is more than ten times bigger than mine, and yet they are not happy or for sure no happier than me. If that is what people envy; then I'm guilty as charged.]

what a pleasant surprise to see a bounce in the miners. AUY and SLW in the green (finally). Yes I fell in love with the metals and with these stocks and have learned my lesson. I will trade them in a more disciplined fashion in the future (as soon as I break even, ha ha ;)

for the tech watchers: VMWare up 7%, Western Digital up 14.5% !!!

Amazon hit a day low of 44.50 but is at 52.32! This stock has shown a lot of strength since their quarterly announcement.

jacek

With regards to your critiquing of Bill's bullish calls, it needs to be pointed out that each and everyone must take responsibility for their own trades and investments.

Bill can be rather demonstrative when he makes a call, but that's just the way it is. There are many on this forum who say things in a similar way when they feel strongly about their views.

If someone buys based on a recommendation from someone, then they better have total access to that person if and when the trade goes the wrong way, or they'll be left wondering what to do.

Risk management is of utmost importance when operating in the markets. If one does not utilize stop losses, or implement some sort of hedge (using options), then they expose themselves to great financial stress and potential losses.

Everyone here is putting forth their opinions, nothing more.

I hope you're able to get back to a position where you feel comfortable financially.

pappdjavul - "The oil sector equity bulls have a really big problem which they've been ignoring the last 2 weeks or so - their basic commodity just keeps trending down."

The second problem I see is recovery from bottom. This could be a slow and painful process if the USD doesn't fall precipitously. A firm dollar and stagnant economy spell stagnant oil, until emerging economies soar. Still plenty of SUV's on American roads, but utilization will be low for some time into the future.

CP,

On the app form I filled out there was a question about marital status/divorced. The best I can help with is to provide you a local(SD) number to a person who provided me with all the paperwork and help to determine eligibility. The app is then filed with a legal org out of Chicago(no charge) to the VA. pm me at attrite1atcoxdotnet and I'll get the name and phone number to you.

Although I do not post often, some will remember me as a doomsayer and extreme bear from this Spring. I have started accumulating positions in small doses in the Canroys. If anyone is usd based, the Canroys are on a currency sale as well as sector sale. Some are cash rich and have low payout ratios. They will be in a position to pick up assets on the cheap from weaker trusts. They also pay dividends for waiting. My opinion is that the sector is mispriced now.
Regarding Bill's bullsih call: I do not think it is unwise to start accumulating. I remember the post and it helped me to start thinking in terms of value. If you bought cash and started legging into the position, you are in a position to add on the panics. What is valuable to me here is not the exact timing of the call, but the frame of mind. I do see a possibility of more crashes, however I am mostly cash and no margin, so I will not be blown out of the water.

2nd - sorry to hear that - the mkt is down some 25% since the end of Sept...

First post. Thanks for all you do Mr. Cara.

Rumor that Paulson will force billions onto regional bank balance sheets ... perhaps this weekend in a locked conference room in Gothem City? May take a position in NCC for a monday morning pop.

Shark was a big distraction on an important day. Posters should stay on topic. Sympathy for Shark clogs the board.

Cheers.

FWIW

I was invited to join this community following an e-mail dispute I had with Bill regarding a comment of his that I took exception to.

In his e-mail response, Bill thanked me for expressing an opposing view and invited me to join his community.

Bill is a first rate guy, who gives so much more than he receives.

Out of respect, I would never belittle Bill on his Blog for all to read.

LOL! Oh there is a lot of fortune telling and prognostication on the blog today!

For all calls...time will tell.

I have been using a lot of long charts these days to find decent entries. 10-15 years in some cases, that's how low the panic has taken some trades. I'm not ready to party like it's 1999, but there it is.

there seems to be a twist now...

or just an illusion?

slw is rising..

ToddinFL,

After reading your posts over the past week or so, I have gotten the sense that you are pretty keen on capital preservation. I appreciate your posts, and am still learning about how to stay alive in this game. How have you played the last couple of months in terms of your asset allocation? Are you mostly in cash? Short positions? Waiting for a confirmed rally/turnaround? I think if I had had your discipline a few weeks ago, I might have spared myself some big losses. Thanks for the contributions...

MCM

Bill:

It is an ardent hope that you can forebear and forgive those among the discourse that unwittingly cast the first stone and continue the blog and its discourse session.

The effort and insight is truly appreciated and is most encouraging.

Here a little, there a little with humbleness is the beginning of knowledge, knowledge experienced becomes understanding and understanding applied is wisdom.

A sincere thank you for sharing your wisdom.

"I haven't lost anything until i sell" were the words i just heard from my television in the other room of my home office on cnbc. How can they say things like this?

re: catching Bill's intraday comments

I just leave my browser open on bills blog, and leave the page scrolled down to wherever I've read up to. Then whenever i get a chance, i come back to it, hit refresh, and if the comments have shifted, I know something was inserted above.

Geez, when I write it out, it seems almost OCD, but I assure you, I'm a normal dood :)

I've been lurking for years.....have learned alot from Bill and learned as much from the collective...there's been some truly rude people who I was greatful to see go along the road.....sharkie doesn't fit that same bill....he's helpful and articulate...he's also a person going through a tough time who we should embrace not discard.....that's not to say Bill doesn't have the right or the reason to ban him but rather on the balance of his contributions he should given a reprieve...

re: missing Bill's comments
Again, until Bill changes to Drupal, it is very easy to hit Ctrl F and type in Bill Cara and find all occurrences of that text. Then jump from one to the next to see all [Bill Cara notes]. With the number of posts on the day it is almost impossible to scroll through them all and not miss some of Bill's posts. I'm now using Google Chrome and when you do so it shows you on the side of the window where all occurrences are.

Okay, so back down we go! I find it surprising that Nasdaq has behaved differently than DOW and S&P these past few days... either dropping harder or showing relative strength each day.

401kmatters - Ahmen, time, as Bill puts it, is the primary concern. I agree and respect that 200,000%!

Bill,

What do you think of this research paper from the
Minneapolis FED ? It's says bank haven't stop lending....

http://minneapolisfed.org/publications_papers/pub_display.cfm?id=4062

rob d
I have made a few dollars as of late, and i repeat a few, because i have been in cash largely due to the fact that i am giving in to fear due to the fact that my employment situation is rather precarious as of now even though i have been with the same company for thirty years and we are a unionized shop, i have one son i college with second semester fees due soon, along with the book fees, and another son who will be entering university next year. I try to give them as much help as possibe because i really dont want them graduating with a large debtload.Also retirement is really not that far away and i guess that all of these factors have formed me and my style in regards to the market. Having said that i believe that soon things will be better, im not trying to catch a bottom, just trying to manage my finances and hopefully some of my bids will come in at where i feel comfortable in holding them without the fear of being taken out due to stops.

Jacek
What part of managing your own portfolio using precautions such as stops are a lot of people missing ? Bill being early, hmmm, let me think about that for a minute, yes i recall him being early in telling people to sell cause the market was going to tank and i recall one poster heckling that call saying he made 15 % more cause he didnt listen to Bill. So lets due the math, a $100,000.00 portfolio plus the 15% + $115,000.00, now deduct 40%, give or take in losses leaves approx. $69,000.00, sell into strength on Bills call and you still have your 100k, plus the approx. 3 % in interest over the year = $103,000.00. Now lets say that we are able to double our portfolio somewhere in the future, that will be $138,000.00 to $200,006.00, nice little difference. I have read Bill state many a time that if people dont feel comfortable trading or managing their own portfolio that they should perhaps deal with a financial advisor, but finding a good one is very very difficult. When people think on and for their own and speak their minds they are often ridiculed and called eccentirc, cause thats not the mainstream, i am feeling the same thing with my co-workers who i try to introduce to Bill and his blog, they were still making good returns with their mutual funds and things were going to be good forever, just buy and hold right, now i ask them how many of the financial advisors told them to withdraw their money, i guess the average response i get is " Dont worry, its just a paper loss, they will come back", trouble is how long is it going to take this time.

So lets get back to Bill being early on the Bull call, you bought a stock $30.00 and its down to $20.00, the bad news is your down 33%, the good news is that you bought this stock with a $103,000.00 portfolio and not with a $69,000.00 portfolio, and we are at or near the point where the market will turn and you will make your %33 back soon and then some, you just didnt catch the bottom of your stock just like i didnt and the majority of the people dont. One of the first things i read when i first starting reading this blog a few years ago was Bill stating the true measure of how much your portfolio grows is not measured by quarters or one or two year periods but rather how much it has grown over the course of the market cycle, from bottom to top and then back to the bottom.

Can we please get back to the plunging markets? :)

Bill your 4/8 column was prescient. If anything, there is also a problem with under-employment, where full time jobs are being split into two part time jobs, each without benefits.

Given what looks like an accurate picture into 2010, I am wondering how equities and commodities will be showing any life for quite a while - other than hits to the supply side. I know the market will lead the economy, but with that outlook, it seems like we are quite early to be going long. Just wondering what I may be missing -

Stop talking about bottoms!

Daily bet on QQQQ results? My guess is $29.29.

Frazeli, NYUgrad,

Yes another one is WFR (Memc), opened down at $16 then up to $20, currently up 10% over yesterday.

They have a positive view of silicon supply going forward based on increasing solar demand.

No position yet.

DGP, AUY, SLW, GG all up, even USD is green for once.

MCM

I'm mostly watching prices as I'm not currently focused on short term trading. Short term traders who manage risk well, and who take profits on a regular basis have had the opportunity to do very well during this volatile period.

Generally speaking, this is not a time where being short will balance the risk involved. Again, if you're trading intraday, then that's different story.

As I said earlier, there are certainly some solid values in the market, but only if you have a longer term time horizon.

For investment accounts that have a 10 year and beyond investment period, then scaling in to blue chip quality positions in small 5% increments is probably not a bad idea right now.

I'm not a big fan of averaging down on a position. I much prefer to buy in small amounts as a stock moves in my direction as it gives me confidence that I've made the right decision.

So while many professional money managers must use the method of buying a position while it's still in decline due to their sheer size, smaller individual investors can be more selective and only buy more of a stock once it shows them a profit.

All this said, it's always easier to talk about sound portfolio management than it is to actually implement. It takes experience, discipline, and focus.

Just one person's opinion, as always.

About shark's comment.

Shark is always shark and I respect him for speaking of his mind except he often is sensitive enough. In that sense he should be punished.

On the other hand, Shark is an great independent trader since he do not follow others' and trade base on the technical trends.

re jacek,
I have been reading Bill's posts since 2005, and learned a lot from him. Bill is especially good at analyzing interconnections between different parts of the economy, market, and government policies. Major trend, the key word is "major" can be spotted by doing that. He said something very early this year like " economy is bad then gas price will go down". great idea to speculate on!

However, someone had mentioned not long ago that "Bill's predictions are good but usually delayed". Bill is merely an observer like everyone else, a great one.

So what's the problem? Like Alexander Elder said in his book, most people want to find a leader a father figure to follow. However, they stop thinking once they find one!!!! They do not understand the nature of the business. High risk!!!!

Anyone who wants to become a successful trader needs to realize that it's one's own job to watch out for himself! Not Bill's.

Also, not only Bill but also many others like Craig have many times emphasized risk control(e.g. stop lost order). Sell trades if they make you not be able to sleep at night.

1. if you buy simply because Bill think it is a bull market, then you need to grow up or trade better.

2. Technical analysis is also very important. Fundamental analysis ( bill's work or words ) need to be technically confirmed!!!!! As now, it is not yet confirmed!!!!!!!

3. Everyone needs to be responsible for his own behavior as a grownup.

The only problem I have now is that only a few regular here can think by themselves here. the majority readers are Mom and Pop like me. Bill wants value to be added to this place, so I think we need Shark here despite the fact I do not his personality at all.

Shark has a strong personality, and that makes he be able to hold an opposite view when talk to Bill. Shark is smart so often his thoughts are valuable though he does not share them very often. The biggest benefit for keeping him here will be to alert others because his often different view. We need it.

Bill is sharing his great insights for free here. I think we as readers should do is to digest what he says and find out how he thinks. practice trade with risk control. Over here, not a lot of technical analysis are discussed. so we need to figure out on our own.

HNCadet, done, thank you!

Craig,

As Nemo said it is pretty much the whole world right now to the 59 friends and relatives on my list of those who've lost jobs so far.

Also to a large number whose retirement portfolios (and income source) has been decimated this year (not yet fully recovered from 2000).

CP - re the energy sector,

It is my favorite sector, I have to tie my hands behind my back . . .

Besides crude having to at least stabilize, at least as important is that corporate debt has to unfreeze. Otherwise all the debt-leveraged companies are going down down down. Russia seems to be in that that also, perhaps you noticed.

GSL-T - Good management & $38mm in the till to cover feasibility in process....good for a scaled entry @$.88 /45mm mrkt. cap.
Measured and indicated gold resource, as of December 31, 2007, at 10.15 million ounces compared to 7.42 million ounces the year before. Also 37.76 million ounces of contained silver. Inferred resource now 3.43 million ounces of gold. Columbia property fwiw. Happy Trading

I've been here long enough (longer really) to see Shark banned the first time.

Does anyone remember that? Do you remember what happened that day?

I do and I'm going to take a Sharkie kind of chance and predict this is a jump the Shark bottom.

I think (and I know he would find this funny) if we stuck a flag in Shark's posterior he would signal tops and bottoms and big market moves with amazing clarity.

For several years I have thought that the Fed/Treasury/PTB had a choice to either save the $USD and let the market crash or let the $USD go down the drain to save the market.

Today started with a huge move up in the $USD and a big sell-off. The $USD has now sold off (some) and the markets calm down (some).

The "interventionalist" are going to have to pick their poison and live with it.

AIG may need more than the $120 Billion already allocated to it by US taxpayers. Wasn't the (private) bailout of LTCM that saved the markets $4 Billion? It seems to me we are exchanging private defaults for a massive public default. The only question is when that will happen. I can't believe Greenspan accepted that Medal from Bush.

Gold going parabolic now, up $60 off the lows.

The next president will have a harder job than even FDR.

CP, re. SPX at 700 or not, I am just using straddles, I have no idea whether SPX gets there or not, just pointing out what he said. The more interesting part was on always having a send chance to get in.

"if we stuck a flag in Shark's posterior he would signal tops and bottoms and big market moves with amazing clarity."

ROFLMAO !

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

Craig's post also brings up an important point that some of our newer readers/posters should understand:

This is not the first time that Bill has had to deal with Sharkie in this manner. Please respect Bill's decision.

Regards

I have not heard a single economist (including Roubini) predict unemployment > 8%. So we are talking about 4 out of every 100 people being unemployed over the next 1-2 years (over the normal 4).

Over 70% of the US GDP is the consumer who is currently "tapped-out". So I assume that many of the newly unemployed will be coming from the recently created consumer businesses which represent excess capacity (http://truthteller998.vox.com/library/post/over-70-of-the-us-gdp-is-consumer-spending.html) .

So if we take the unemployment drag on the economy and combine it with the increased costs of borrowing (back to historical norms perhaps) then how do the bears arrive at Great Depression 2.0?

All of this Great Depression talk has seeped into the market's psyche and that represents an opportunity for those that can keep their eye on the horizon.

If you take that and combine it with the newly minted "Sharkie Signal", then how can you not be bullish?

I don't know if anyone noticed, but bullion prices have rallied in the $US by more than $50.- since last night's low.

BH:

I don't think it's people disrespecting Bill's decision. Just as we attempt to analyze Bill's calls (I thought we'd go below DOW 10000)we're analyzing this one. As long as it's done thoughtfully and cordially. Shark did provide value add, and he was over the top sometimes.

There but for the grace of God go I...

To those that want to defend the comments of shark_attack today, I offer the following image now that we can visualize what Bill’s beach looks like.

The sun is low on the horizon as it is early morning in the Bahamas. Looking towards the beach I see Bill sprawled out over a beach chair trying to grab a few moments of rest. After only 3 hours of sleep last night he still got up before the sun to check markets around the world and write his daily report for the thousands of people around the world who so appreciate his opinion. As usual, he got the report out before the market opened and has meetings planned for the rest of the day. But first, just 15 minutes of rest on the beach to recharge the batteries. Wait, the cell phone rings and someone on the other end says “Bill, better check the blog, another flamer today. Slowly, Bill rises to his feet, reaches over to pick up a huge beach ball (solid gold), places it up on his shoulder and heads back to the house to clean up the mess on the blog.

How much longer do you expect Bill to stay with us if he is treated that way? Thankfully, he realizes for every heckler there are a thousand with only gratitude. But to those justifying inappropriate comments due to emotional pain I would caution you, defend those comments at the risk of losing Bill.

Personally, I am in a lot of pain for stupid decisions I have made in life. Not for a moment though do I believe that lashing out and blaming another person for my decisions would provide me any relief, any more than punching the door or kicking the dog.

Mr. Cara, again, thanks for all your efforts in maintaining and supplying this blog with one man's point of view and opinions regarding the markets and the sphere of influence behind them. Albeit, a man with a vast amount of experience and knowledge regarding the subject and the sole purpose of the blog (Market Education). Obviously, this blog brings together a wide array of individuals in terms of age, investment/trading experience, incomes, education, etc. And with that said, it’s my own humble opinion that ultimately each individual is responsible for any decisions they choose to make based on the absolutely free information provided. Free advice is only worth what you make of it. And while I may or may not choose to act on any information put forth, I certainly don’t condemn the messenger for their opinion. There are literally thousands of sites spewing forth an endless amount of differing opinions regarding the direction of the markets and the world in general. It simply comes down to a decision that must be made by each of us individually. And for someone to direct a challenge toward you regarding a differing opinion of the direction of the markets is simply nonsense. We all will enjoy the benefit of the correct answer in the very near future. Thanks for offering your valuable insight and opinions and all the very hard work put into this blog.

"I don't know if anyone noticed, but bullion prices have rallied in the $US by more than $50.- since last night's low."
Posted by: FranSix at October 24, 2008 12:47 PM

that's exactly why no one should be selling into weakness...

Chickenpookie -

"Guys/gals - all you have to do at the end of day is run a Edit/find: "Cara note:..."

From where do I use "edit/find"? Do you copy the entire blog into Word document and do it? Thanks.
---
OK. It's my turn to stick my neck out, bearing all consequence. This is an extremely stressful time for all. When one is on the verge of losing a love one in the midst of financial disaster, extreme reaction happens. This not to say that his action is justified. Bill is entitled to his re-action. Sharkie has lost his better judgment this morning for sure. However, I ask all to give him a little leeway.

Sharkie's posts, though often contrary, gave me pause & sources for further study. I shall miss his insight.

God bless America and this blog!

JesseSLC,

I have not read a single person defending Shark_attack's comments today! The general gist of what I've read (and written) is that he's out of line but perhaps should not be banned.

Let me put it another way: perhaps Shark_attack himself agrees with you, that lashing out and blaming for relief is wrong. Should that be it? I think it is dangerous in this virtual world to simply "ban" a person. Perhaps too much like a video game.

Obviously, in the end, it's Bill's call to make.

Been lurking here for a couple of months. I think it might be important to consider that at this point the extent of the hedge and mutual fund unwind is unknowable. 10,000 highly leveraged hedge funds were not an issue in any of the crashes in the past. Stock's reputation as an investment vehicle have been been severely damaged. Stocks are not going far without retail public support. Meanwhile the bond has just made a triple top with three deeper panics generating three lower highs. If you leave plenty of room for a retest I think this trade is fairly safe. Foreign bond investors are going to need their money to recapitalise. No one is going to lend us trillions at 4%.

Brown-Cal: Another indicator is who pays attention. All the people in my life that ordinarily wouldn't know the DOW from the TAO are suddenly all alarmed and listening to the bad news on the nightly news. Even the comedy shows are making jokes. When my youngest brother knows about the market news, it's ubiquitous.

Kinda the same as the NY Times/Economist cover top indicators. Or getting stock tips from your cab driver or shoe shine person.
When the *entire* herd is panicked, how much more adrenaline can they generate off of the exhausted leaders? Just like buying runs out, so will selling.

I have no comment on the first post of the day, a little disbelief when I read it; whatever.

Not committing any new money at this point, no averaging-down, no backing up the bets I've made - I want to see where we go from here for a change.

I haven't seen a real recession in over 20 years (81-82) and that was a pretty bad one. Affected me personally in many ways, but I survived - as I believe the vast majority of you will survive this downturn as well.

My gut wants to keep telling me this will end soon, but looking at the numbers every day its not looking very happy out there.

So I will just wish all you traders, long-term holders, bulls/bears, closet goldbugs, whatever your perception is at the moment - best of luck.

I'm going to hold and watch for a while...
PS.
Chickenpooks - look forward to your equity post.

Cara 100 SYT had a very nice earnings report and reaffirmed guidance for 2008.

It is a beacon of green in a sea of red today.

Nice addition, Bill.

CNBC

9:00 panic
10:00 confusion
11:00 paralysis
12:00 disappointment
1:00 more confusion

[Bill Cara note:

Except for a few times during the Great Depression period of the late 1920's-early 1930's, and October 1987, this past week or so is the only other time in US equity market history where prices have fallen this far below the 50day MAs in the major indexes. In every other case, there was a significant rebound that followed. I feel that if you have decided to get out on the way down, you are out now. You are now watching only the accounts that are going through forced selling. You realize that at such few times as this in history, equity markets have failed to operate as a value pricing mechanism. When you see the turn, I believe most of you will want to participate and the sellers will not be around and the short-sellers will stand aside. This rally too will be a significant one. I believe that solid Cara 100 commodities-related stocks like XOM, CVX, GG and ABX will be major beneficiaries of the rally.]

Hi!

Lets keep our eyes on the ball here:

- It's Bill's Blog, his property, running on his rules.

- The rules are clear. By asking permission to post, we have accepted the rules.

- He pays for all of the running costs.

- He spends thousands of hours offering top tier independent knowledge about the market.

- We benefit from it, at no cost.

AND,

- Bill cares personally for us all, as I can myself testify.

Any questions?

Ok, so not that we have got it straight, lets focus on trading please.

Enjoy your weekend.

Best,

Pretty remarkable declines in the Russian cell phone operators, VIP and MBT.

Does anyone use cell phones in Russia anymore?

Correction:

"NOW that we have got it straight, lets focus on trading please".

ADDENDUM:

Thank you Bill for giving us all this,

We appreciate it.

Best

bsi87,
Great call on DGP BUY yesterday....

Maromatics

I agree

SV

BH, have you seen Arctic Glacier lately? The streets are flooded with melted ice. Long sold around $10.

C3 edit/find

In Firefox or IE, just hit "control F" or under the edit menu you will see a "find" menu, it will bring up a box where you can type in "cara note" then hit find next, read, then find next, etc.

I find it works better in FF as in IE you have to slide the scroll bar as if you don't you will loose the position on the page and it will go back to finding the first one.

Quasi

Arctic Glacier should be helped by the Loonie's crash. It's a speculative position however.

As heard on NPR:

A Financial Planner states that her advice to people in regards to the current financial crisis was to NOT LOOK AT THEIR STATEMENTS! This is what passes for financial expertise in this country. This is what comprises a good chunk of the sell side. This just exemplifies the relationship between business and media.

This actually emboldens me to espouse a good portion of Bills social equity principals and start up a firm.

I wish I had caught her name because this is intolerable!

btw if you are interested in taking a few flyers like Arctic, how about that Algonquin Power and even Enterra. Or maybe the world will end and we won't need utility power or gas anymore. Algonquin will benefit greatly if carbon credits are ever traded in North America.

Brown-Cal

You are right, defend was not the proper word to use. My point is that no amount of emotional pain justifies those types of comments to a person who has been nothing more than kind, generous and loving to anyone that wants to participate in this community.

I really think it is a fallacy to equate current situation to 29-33. It may be better or worse but it will play out differently. The fact that the entire world is using fiat currency will likely make the events to proceed faster and more furious. As quickly as we switched from nearly hyperinflation to deflationary collapse we can switch again to hyperinflation. There are no restraints in monetary system anymore. Just think what happens if the world prints few trillions and gives that to ... chineese consumer, just play that scenario in your mind for a sec.

Quasi - thank you. that's very helpful.

Quasi

'control f'

works ....thanks

SV

SiO2,

I try not to look at Arctic Glacier. As you've commented, who wants an income fund with no income?

Regards

c3 - "From where do I use "edit/find"? Do you copy the entire blog into Word document and do it? Thanks."

No need for copy/paste!

It depends upon which browser you're using, and maybe how it's configured to some degree. Try ALT + E, or configure your view options (ALT + V) to display a missing toolbar(s) at top of screen. Normally top of your screen are File, Edit, View, Bookmarks, Tools, Help (standard toolbar). This may be turned off/on. Maybe I can help more if you tell me which browser you're using (Internet explorer/Windows Vista?).

note: ALT + E means press ALT key and E key simultaneously.

On China -

Several articles out today on China and the global recession. I got a feeling that infrastructure (ala industrial), farming and energy will remain the focus & emphasis in Chinese economic agenda. Here are the articles from Times & Financial Times

http://tinyurl.com/6gqjse
http://tinyurl.com/63eobj

Firefox+Greasemonkey+KillFile=never reading selected commenters, unless I choose to.

Check it out. KF specially modified by the developer at my request to work on billcara.com.

re: searching in firefox
There is even better way. Go to tools / options / advanced tab / general tab / accessibility and check the box "Search for text when I start typing". Then you do not need to even press control-f the search line appears automatically when you start typing.

What has drawn me to this site and maintained my interest is the uniqueness of what Bill seems to offer. I find many sites that describe themselves as trading tools/ learning tools, often play to the headline spin and emotions of the market....newsy stuff..blahh, blahh, blahh...

This site by Bill Cara has a solid feeling to it. When he puts out WIR and his daily insights, I sense thoughtfullness in all that he does.....very happy to find it, and I'll be more satisfied as I make some money/ protect what I have as I learn....thank you Bill and the rest...

Wavesmash - re your post of 842AM - unemployment figures are a percentage of the labor force, not the total population. The labor force does not take into consideration the ranks of the incarcerated, mentally ill, hospitalized, or those serving on active-duty in the armed forces.

No harm meant - just setting the record straight...

E-mail from employee at Northwest Territorial Mint...

I happen to work at the Northwest Territorial Mint. You are not kidding about people having trouble getting silver. I can tell you from first hand experience that we are working 10-12 hour days, and looking into starting another shift to keep up with the production of silver. It is selling faster than we can make it, that is when we get it in. Our crucible is running from about 3 AM to around 10 PM. As soon as we get any silver in it goes right out the door again. I have worked there a number of years and have never seen it so busy, nor seen us as strapped for silver.

http://tinyurl.com/59npql

To continue on my 1:19 remark - all that is needed to immediately fix credit crisis is the bloody smell of another bubble. Then the invisible hand will do it's magic thing and the money will flow again as if nothing but a bad dream happened.

IMHO not a penny should be given or landed to banks directly - it is a pure waste, instead helicopters should fly over things like alt energy, chinesse consumer etc and attach a smell of blood to these objects. The thing will correct itself in a microsecond.

mebea,

i cant speak about all but most financial advisors are just sales people, especially newer ones. bad ones at that. Good sales people are great listeners. My 1 yr internship at Merrill Lynch was enough to make me sick and it actually pushed me away from wall st once i saw what goes on with other people money.

I recall an interview i will never forget at pwc. the guy was grilling me on why he should hire me. at the time i had already made up my mind not to pursue a profession on wall st. i simply stood up and said "why should i work for you? i am not going to advise anyone on anything. you are going to tell me what to sell on any given day and i do it like your monkey! he leaves me in the room for a good 30 min and after coming back he offers me a job"

Even if i were to have gone into a non sales role, i prob would be looking to change profession with the onslaught of layoffs going on now, if i even lasted this long.

but i will never ever use a "Financial Advisor" in my lifetime. EVER

How secure is the dividend on SYT? Any opinion one way or the other?

Find/Edit - All: thanks for the tips. I use Firefox and got it working.

unless my advisor is Bill Cara Advisors.

I'm starting to lose faith that we'll close in the green, but crazier things have happened.

Anyone have the relevant fib values for INDU, COMP, and SPX?

Sharkie is very intelligent and also quite colorful. But, he's also irrepressible; he doesn't just go up to that "boundary line" we all have to toe, he frequently goes over it. That puts Bill between a rock & a hard place. So, I respect whatever Bill chooses to do.

My heart goes out to Sharkie with his mom's health condition. I can see that situation is devastating to him as it is to everyone in that situation.

Posted by: MikeNYC [TypeKey Profile Page] at October 24, 2008 1:26 PM [link][kill]​[hide comment]

"Firefox+Greasemonkey+KillFile=never reading selected commenters, unless I choose to...."

Thanks Mike,just installed it for a trial, I think I like it. On the new site we'll have a few new options also.

I would like to take a moment to express my appreciation to Bill for all he does for us. While it is pretty obvious at this point that Bills’ September bullish call did not foresee the monumental crash that soon followed, his intentions were as always, of the highest and most generous order. Bill is a man who puts the higher good of all of us over his own good and people like that are very, very, rare indeed. Bill Cara is a unique individual who has created and maintains an internet community that has attracted many equally unique individuals. I suspect his selfless work inspires us all to be better people. To me at least this is more important than financial reward. Money and stuff will always come and go in life but “selfless giving” is of a divine origin and should never be minimized or forgotten.

Thanks Bill.

Chris

The TSX has been on a slow slide since just before noon. However, the great thing about this market is that that could all change very suddenly :-). Or not. There is just no way of knowing, it seems.

I post rarely, but read this blog everyday. Most days I'm at my
computer and CNBC is on mute.
Six months ago, I turned into a day/swing trader, with OK success. A few days before the dramatic drop I bought
GE 2k, BA 1/2k, AAPL 1/2k, DELL 2k, RIMM 1/2k and ERTS. Their prices looked good at the time. I had, and still have TTM,GOL, GOOG, KRY, UXG,WGW,TSO,OEX,NUV,and DIS.
I have a little cash left.

I know the market will turn positive and I think I have stocks that will go up. After the market makes it's first rally, I'll evaluate again.

I went through the '87,'91,and '2001 crashes. Back then, I had a full-time job in another industry, and refrained from reading my monthly statement until there was a turn-around. (Much easier that way!)

Since I decided to be a student of the market; I watch, read, and listen to the market. Lately it seems like we are in the last 2 minutes of a very exciting football game.

Today, I feel poorer than last month, but I know that will pass.

What do I do to keep positive?
-I don't look at my acct. balances.
-I do watch my stock charts through out the day, and if a price looks right, I sell a little to gather some cash.
- Since I sell high and buy low, I think of my portfolios at the prices I bought the stocks for-- to keep myself positive mentally.

Almost forgot, I have 30k in Canadian Maple Leaves which I bought when gold was around 780. Thank you Bill Cara for encouraging us to keep the real thing. I found a reputable gold
seller close to where I live, and have formed a trusted business relationship with him.

So, I'm fairly diversified and I thank Bill for that. I use his RSI-7 system, and I have his book which I read and refer to frequently.

I have a question-- does your RSI system continue to work after this market adjustment, or do you adjust it?

Sarah-Hadassah

All this Shark's vs Bill's opinion stuff reminds me of the CNBC, FOX, CNN offers to cast a vote on where you think the market will be buy a certain date — as if our votes will change the result —silly and useless.

The only thing I would add is this—

Critics of Bill's calls should remember a couple of things:

1. The opinions he expresses are his and given at no cost to readers.

2. Readers are free to accept, reject, disagree, whatever...

But placing blame for actions can only legitimately fall on the one who made the trade.

I've bought XOM and GG which are now down 8.1% and 53.9% respectively. No one held a gun to my head and I hope Bill's recent rally view pans out.

Needless to say I could have bought at a lower price. Also, I could have fallen in love with a rich woman 47 years ago. I'll stick with my decisions "for better or worse."

Money is not life — just something which passes through your hands.

Those of you running Windows systems:

Highly Critical Microsoft vulnerability MS08-067

This update was released today and is generating a great deal of concern. It is obviously not your standard update.

Zero day exploits have, I believe, been spotted.

Everyone should, at a minimum, consider this update. I'm not telling anyone what to put on their systems. I AM telling you, as a pro in the field who will be working late patching everything in site - look into it.

Those of you who have no idea how to evaluate a patch - just run Windows Update and apply any pending Critical Updates.

dbear,

I'm loathe to express an opinion on dividend safety in this environment, but if I had to guess, I'd guess that not only is Syngenta's dividend safe but will be higher in 2009.

Read their latest earnings report. I'd link it but tiny url seems to be on the fritz.

Not a recommendation to buy, but I'm giving it a long, hard look.

Regards

10 day ATR for $gold is 45 bucks.

is there counter party risk in options right know?

If i buy 1000 contracts for gg April $25, and the stock goes to $100 before expiration. (extreme example). What happens if the seller of this call goes bankrupt?

Vad,
Thanks for the link the the info about Greenspan and Ayn Rand.

I agree that Greenspan(in his fantasy world) might think he agrees with objectivism and free markets but his actions speak far louder than his supposed beliefs.

However, I could see his devotion to Ayn Rand because of his identification with her villains, who were always taking(taxing) more and more of our money to reward their friends and promote social goals that were alien to us with our money. Then encouraging everyone to lie and steal and cheat.

Many of her villains were Greenspan to the core.

Rob.

if we close here on the S&P, the previous 900 level is gone and we're destined to go to 2003 levels no?

I'm still watching the UYG $7 strike June 09 calls. I actually have a price entered at $2.90. The low so far has been $3. I think we could see an end of the day plunge for sure.

And I can't see UYG staying this low for much longer unless the "gang of nine" is going to get thrown under the bus.

Rob.

market website headlines are too much - I just want raw data - does anyone have a news feed that is real-time with just the headlines, streaming? free of course! - I used one on IRC channels but lost the link recently...

Toddinfl,
You want to see some other Russian carnage, check out MTL.

A Russian steel company that has a far stronger balance sheet than GM but is right down there with GM now.

It is really starting to seem like many of these foreign markets were entirely created and funded with bubble money. Thus, a worldwide depression will have far more severe consequences for many people above and beyond losing some money.

Rob.

jpp - exactly what I was thinking. We'll be in need of the 3pm express heading north again, but whether it comes today is anyone's guess, especially with the weekend on the way.

@Rob,

Most of these banks are insolvent. They are the ghosts of roadkill.

Do your own diligence, but I see no need to go there. You're better of shorting the largest ones (though it may feel risky because of the lack of transparency).

NYUGrad

As I understand it......as long as you are buying the option on a regulated exchange, your counterparty is the exchange, not the person who sold the option. As that option becomes more valuable, the option seller must post more money to the exchange in order to maintain their margin.

If the counterparty cannot maintain necessary collateral, they are forced buy back that option at a higher price. So, in my understanding you are not at risk to any counterparty but could be at risk if there was somehow a failure by the exchange itself (which is unlikely IMO though I am careful to "never say never").

The fatal flaw of CDSwaps is that since there was no regulated exchange, there is/was no insurance that a counterparty was acting in a responsible manner in order to maintain the necessary collateral. All we had was faith in Wall Street to regulate its own margin internally.....and we all know what happened next.

This is just my understanding so others chime in if I do not understand this correctly.......

Finger Lakes-

Would you mind posting those links re: Greenspan & Rand? I would really like to read that.
It has seemed to me on more that one occasion that our current financial crisis has serious Rand(ian) overtones. Kind of an "Atlas Shrugged" for the financial industry.
Thanks!

MikeNYC - does the patch require the usual Windows restart - if so I'll wait until later today to install.
TIA

Forgot to say: thanks for the comments earlier to my GG/ABX question.

MHO....plunge protection at 3:55 to close positive...settle things down over the weekend, but I won't be a buyer.

Re occam_razor, another bubble:

I think we have that "another bubble" forming right now, it is currecy bubble, or more specifically, USD/YEN bubble ....

cyderman - I suspect that's the patch that my computer auto-downloaded last night. Yes, it required a restart.

Bull Hunter,

will continue to look at SYT....balance sheet, earnings report etc.....i'm drawn to dividend stocks personally....i'll tell you if and when i buy....

For those looking for signs of an approaching turnaround:

http://tinyurl.com/6gqt8o

Thx BillySundance. I was thinking the exchange was responsible as well. but with these unforseen times i am just skeptical of everything. the dot com bust seems so rosy vs this one. and i am only 31 yrs old so this is really my 1st experience with a deep recession. I was only 10 yrs old in 1987 so my mind was on other things back then.

Sarah-Hadassah- if you care to share the source of your Maple Leaves, let me know...

Mr. Cara-I thank you for valued information and opinions. I have never posted but appreciate letting us tap your vast experience. I don't have any light to shed on our unsettling economic turmoil, but enthuastically read the community input. My family ancestry was from PEI so I enjoy visiting Canada frequently. Any insights both political/economic to the energy trusts would be appreciated. Thanks again!

moab - if you want to convince me of 'w' bottom close above 985 and break the trendline - that's about a 110 point rally from here - highly doubtful - wouldn't that trigger a circuit :) - but as stated above "never say never"...

cyderman: Yes, a restart is required.

I usually look like a fool when making predictions, but whatever, it's Friday. On the subject of the QQQQ close, I'll go for 30.4.

That percentage climb gives us a nice "save" on the Dow (above 8500 where you can draw a trendline), and above 900 on the S&P (a recent battleground), to keep the bottoming process flatlining. Plus it's by no means out of reach based on past last hour performances.

javalina1,

Welcome to the discourse. Feel free to start posting, you can't know any less than I do. ;^)

re: Canadian energy trusts

In the middle of the night, about two years ago, the Canadian government changed the rules on Income Trusts, costing me a pile of money. I'll never trust them again.

Again, welcome, but watch out for that Craig guy. He likes to perform unnatural acts with flags. ;^)

Regards

I'm actually pretty amazed at the market's resiliency at this point (though, I doubt seriously it's come w/out intervention).

If the Dow closes at the levels, it will end the week down about 5%.

Looking around the world -- especially in Asia -- at what's happened this week... pretty remarkable!

navid,
I hear you. I guess my reasoning is that the big banks own and run the system and I don't see anyone standing up and changing that.

Instead I see governments encouraging more of it by showering money on the banks as fast as they can print it.

that leads me to the conclusion that the banks will prosper whether they're insolvent or not.

The only wildcard as far as I see it is if the entire system collapses. But at that point all bets are off anyway and we're back to bartering.

Rob.

goldbug58,

thanks, figures didn't sound right to me...

Would we have higher unemployment if there wasn't a couple of wars going on right now?

The fact that Russia's sovereign CDS is currently trading at "distressed" levels seems patently ridiculous considering the country still has half a trillion dollars in official reserves - the world's third largest amount and more than 41 times as large as ten years ago!

And remember that in 1998, the Russian government never defaulted on their Eurobonds -- only the domestic ruble bonds were restructured.

So for traders and the media to see Russia's sovereign CDS trading where it is now and assume a Eurobond default is inevitable simply beggars belief...

But the Russian equity selling goes on...and on...the local market been beaten to a pulp...even as Russian companies remain giants in the global energy space. And no, Russians are still using their mobile phones just as much as a few months ago...before all this insanity broke out. In fact, they are probably using them more now that Apple has officially rolled out the iPhone...ads are everywhere around town.

Today the blow to sentiment was S&P lowering their ratings outlook on Gazprom to negative...does anybody even listen to these clowns anymore? Arriving at the scene of a slaughter to shoot the wounded.

I am confused right now about why we are seeking regulatory advice from those who provided over our current meltdown? Its like the foxes have the hen house surrounded........

SEC's Cox Says Supports Merger Of Agency, CFTC

http://tinyurl.com/5m9bdh

provided should be PRESIDED

dapoopa,

"the country still has half a trillion dollars in official reserves"

I heard two days ago that Russia has been spending that money like crazy in the last month. I believe they spent 200 billion. At that rate they will have spent all of that by the end of the year. With oil prices down, look out.

Dow only down 199 points...YEah!

Javalina1,

In 2011, all Canadian royalty trusts must become corporations again. Their yield will therefore be less than it is today because they will be paying with after-tax dollars.

Only those trust that have a significant tax loss pool will be able the revert back to corporate status will minimal damage to their unit price.

I'm not saying stay away. The yield and leverage to energy is great. However, keep these risks in mind.

hayduke,
I didn't have the link. I was responding to Vad's post about Greenspan's link to Ayn Rand. Maybe Vad has the link.

The main theme of "Atlas Shrugged" as I understand it is the struggle for man not to compromise his values in the face of extortion and tyranny, otherwise he won't live up to his ideals. Atlas Shrugging was the act of talented and smart people in essence taking their marbles elsewhere where the game was more honest and virtue was rewarded.

The only way I see the financial crisis resembling it is through Greenspan emulating the villain and destroying the system while professing to save it and then blaming everyone but himself for the consequences.

The next chapter will be blaming the death of the system on the affluent for leaving and trying to force them to stay and play.

A free market would have avoided all this because we would have seen the balance sheet recklessness starting and avoided those companies from the beginning. Instead they were allowed to hide and lie while splitting their shares repeatedly and levering up to the sky. A free market would have sent them to bankruptcy unless they changed their tactics.

Rob.

My thoughts to Shark,
Your call on the market tumble was bang on. It would have been helpful to the community if you had fed us some shorting ideas if you were actively using them.
I feel that the community went into a "long" bias when Bill made the call, and that no one was putting forth shorting ideas. This was frustrating given how much was available in the double shorts.

You would have kept our bias more balanced.

I think we all soar when the trades are going our way, and sag when they are not. You keeping your interpretation in front of us could have lifted us.
Granted, you confessed that you know nothing about technicals and read magazines waiting for something to move. I think that was an oversimplification of what you know and have to share here.
I hope your mother is pulling out of her troubles, and we hear from you again somewhere.
BTW, look at the market soar as I am writing this!

And then sag. What was that?

The manipulation in this market is ridiculous!

I don't care which way it heads as I'm neutral right now. But the 5-20% swings on a daily basis, the rallies from 200 down to 500 up, 300 up, etc. at market close when the rest of the world is crashing... this market is a joke!!!

Media ain't the only thing filled with noise right now.

The Russian's problem as I heard it is that Russian companies have borrowed more in foreign currrencies (USD?) than the guvm'nt has in foreign reserves. A lot of that debt is short term has to be paid back "soon".

No lenders are renewing corporate credit for any except the IBMs of the world at present, then only if they get their arm twisted, and Russian companies are not even allowed on the waiting list anymore.

Big problem for Putin & co. - and did you notice? the price of the Russians' biggest export item is going down lately . . .

I stumbled into this site roughly a year ago and have enjoyed and learned a tremendous amount by reading both Mr. Cara's comments but also many of its members. After being a voyeur on the message board over the past 12 months, I finally decided to join the discussion. You may wonder what provoked me into doing this after so long ... it was largely based on the negative comment(s) by the poster known as "Sharkie". I've been actively investing since 1986 and have come to learn over those many years that "I" and only "I" am responsible for the investing decisions that I make. And I also know that when I'm right, that is great and when I'm wrong, I've got to live with my decisions. Furthermore, spending my time trying to beat another investor (in this case Mr. Cara) is not the end goal for me, my goal has always been and will continue to be to beat the market in general. Sharkie, you should worry more about the decisions that you make versus whether Mr. Cara's thoughts prove to be right or wrong. He is only presenting his point of view and like so many others, you have to "pick and choose" which parts of that view you most agree with ... for my part, I love his site and it beats the majority of pay sites that I subscribe too as sources of additional info to guide me in my decision-making.

Did Mr. Cara call for the bull market too early ... who knows. Could have you got in cheaper after he first suggested you start putting money in ... Yes. But, when and I do me when, this market will move back up and we will have another bull market that may last for many years. If you have been prudent over the last 12 months and taken money off the table and are now starting to put it back it, you will do fine over the long-run while still being able to day trade a small portion of your funds as a sideline.

As my wife tells you me constantly when I am fretting about how much cheaper I could have bought a stock for ... she says, "I've seen you pick your seat all day long but I'm yet to ever see you pick the market's bottom".

Huddie has left the building ...

Bad news for Hank, Ben, and Uncle Sam...

Taiwan's financial regulators reportedly have ordered that nation's insurance companies to pare their holdings of the debt and mortgage-backed securities of Fannie Mae (ticker: FNM), Freddie Mac (FRE) and Ginnie Mae securities, according to a report on the Internet site of Asian Investor magazine.

Such an order would be a stunning rebuke to Washington, coming a little more than a month after the federal government effectively nationalized the mortgage giants. Fannie and Freddie last month were placed into conservatorships with the Treasury standing ready to inject up to $100 billion through purchases of preferred shares in the government sponsored enterprises.

http://tinyurl.com/6kz9ow

Looking at 2 min daily chart of INDU, looks like it has to hold 8500 into the close (main resistance today), or we'll tumble much lower as we approach 4 PM.

re: LAMR

Capitulation. RSI 7 day under 10. Long at 14.13.

re:AEM. lacking 20 cents on upside for bullish engulfing.

Long, sticking a buy limit above HOD.

Russia actually has three reserve funds...the Central Bank reserves are still $500 bln...the $200 bln figure you mentioned is the sum of the other two funds. And of that amount, this is only money that has been earmarked for banking and equity/bond market stabilization...the problem is that disbursement has been slow as molasses. As ever, the problem in Russia is with implementation...

The other is that the market has been extrapolating recent trends way on into the future...e.g. pricing in a $30-40 oil price in perpetuity. With OPEC cutting by 1.5 mln bbl/day starting November 1, oil seems much more likely to bounce off its January 2007 low in the $50s range and start climbing higher...especially given expectations that the dollar's run will start slowing and begin to reverse.

Investing in Russia has always been about extremes...of euphoria and pessimism. Clearly we are going through another bout of the latter...but when the tide of sentiment turns, I think THAT will be the time to look out...for unbelievable asset appreciation.

re:TXN

Bullish engulfing.

Long

BH "re: Canadian energy trusts...
In the middle of the night, about two years ago, the Canadian government..."

Yes I remember it well, it was Oct 31, 2006, commonly know as the "Halloween Massacre" here in Canada.

It was devastating for the trust industry and also for the valuations of Juniors who were in the business of exploration and development, selling to trusts once production was on line, then rinse and repeat.

"He likes to perform unnatural acts with flags. ;^)"

Flags are good!

Diver down, waterskier down, market down!

My .02 - I've been reading through today and see a lot of the discourse directed Bill's calls (bull/bear). As an independent trader lacking any real financial acumen, I would just like to say how much I appreciate Bill's insight. That being said, and reading all the links that are provided on this blog, everyone is responsible for their own financial situation. So I try to gather each day from all different sources, and in ever changing market situations as much info as I can, and then accept those decisions as my own, good or bad. Well mostly bad so far. Junior miners, (KXL.V SBB.V RMK.V PG.T) are the baddest, but I'm able to wait it out. At least I still have a third cash left, no debt, own home. Bill's note today @ 9:40 about the smart? money buying means a lot to me. Wish I knew where that info came from. Cha.

re: russia
Look at historic oil pricing and major events in modern russian history. 1986-88 oil at local low of ~$15/b - fall of communism, 1998 oil at local low of ~$12/b - default etc. They are indeed hooked to an oil. However as long as the oil stays in the $50 range I think talk about another russian default is premature.

I believe Rand held that the ideal society lets everyone act in their own self-interest (and selfishness) and practices laissez-faire capitalism and limited government.

I just don't believe that people's total selfishness is good for society as a whole. First of all it corrupts society to its core, as we are seeing.

@Rob

The way your thinking about this has merit, but let me see if I shine the light on this issue a bit more.

Let's take a bank, any old one, say Barclay's bank. It has 1.3Trillion in assets and it is leveraged 60x (for ever dollar it took in it lent 60x). That means it has about 21B in equity (1.3T/60).

Suppose those assets (ie loans) go down by 2% (like say they were homes and they homes went down by 2%...could happen no? :)) Well their loss is then 26Billion dollars.

Now go look at Barclays market cap, it is 29Billion (# shares * share price).

So that means with just a 2% drop in assets, they lost more money than their company is worth. So even if they government gives them 29Billion to get by, if another 2% drop in assets comes along (could happen)...boom they lost more money than the company is worth.

Get it? Even if they stuff the pockets of the banks they aren't making money anytime soon until assets stop dropping (housing). That is not going to happen for a loooooong time.

I sincerely hope you read this and ponder it for a while, it should give you a feeling for what is happening.

Finally, if the share prices of all the banks were to drop in half tommorrow (ie Barclays market 14.5 Billion instead of 29)...and then another half, and another half...the government doesn't care as long as the institutions stick around as walking zombies even if they kill the shareholders and nationalize them (in the end)...

re:SSRI

buy stop 7.55/7.60

ALL ABOARD... the 30 min "Express to Hell" and back is now boarding and about to leave the gate... the most thrilling 30 min ride of the day... so strap yourself in... and hang on for dear life...

We're off...

Sowing the seeds of the bond market crisis. The full faith and credit of the US is being put to the test.

http://tinyurl.com/6kz9ow (Barrons)

"Taiwan Dumps Fannie, Freddie. And Uncle Sam?"

"Beyond that, Washington might well worry that other nations also no longer view its agencies -- and now, by extension, the very credit of the United States of America -- beyond question."

[ISRG] Intuitive Surgical ($159ish) trading at around 23X next year's earnings, growing at a compound rate of 35%+, for a company that dominates its specialty niche of non-invasive, robotic surgery.

might put in some stink bids here into the close

any bets on last minute intervention?

My spidey sense is tingling. This market has felt strange all day.

Bloomberg: Floor trader says traders have thrown out all the technical indicators and are going with a lunar phase peaking this weekend.

I @hit you not. Lunar phases are now what controls the markets eh?

No wonder there is mindless panic.....

I'll take Bill's crystal ball!

I'm sticking with voodoo...

Dave Hyde,

Let's meet in the middle?

$29.85?

If we were playing by Price is Right rules I'd be spinning the wheel right now... :)

Sold out of BCE 36 DEC today. Whoever got them, congrats! You're more of an optimist than I am!

Does the Dow below 9000 bode ill for the near term?

I prefer divination using animal entrails.

well the S&P is holding at the 878-880 mark... which is a good thing.

Quasi:

Yeah and that was after the conservatives promised not to change the tax structure. Lots of American holders got hosed, but Canadians weren't all that upset apparently since they just voted the conservatives back in again.

or was...

Anyone catch the forecast for tomorrow?

Russia has enough reserves to cover almost all of its private sector debt, should it actually have to go that far - which is hard to imagine. Part of that debt comes due "soon", as in some time within the next 12 months, another part in the next 24 months...the problem is that people think "soon" means "tomorrow" (or even "yesterday").

Granted, it turns out there was a ton of leveraging activity going on, especially among the wealthiest segment of the population. They are now getting hammered by margin calls, and this has decimated Russian stocks. Plus the pension system was never reformed to provide a cushion to the market -- it was way too overbalanced with hot money, especially foreign funds. Local retail investors never really were a factor in the past couple of boom years.

So I'm looking at the current devastation as a major wake-up call to the government to reform the financial system. And I'm sure that once the mayhem subsides, the foreign money will be back -- and maybe joined by local money -- because the value in Russian resources is undeniably huge in any longer-term scenario. The lesson of 1999 was not to sell Russia, but instead to "back up the truck".

And I remain convinced that the Western media is doing their damndest to kick sand in Russia's face -- it seems the WSJ, FT and NYT just can't get enough shadenfreude when it comes to this country. We'll see who's laughing when the dollar starts plunging next year.

hayduke,

link is http://en.wikipedia.org/wiki/Alan_Greenspan. If you google "alan greenspan ayn rand" you'll find a lot more.

moab... as much as I like many aspects of Rand's philosophy, I agree with you that main idea of Atlas Shrugged (collective mind is evil, individual mind is good force, taking care of self-interest will inevitably trickle down for the good of others etc) is a bit oversimplified. Reality is making necessary corrections, after all Mr. Fuld was selfish, took good care of his own interests, yet trickle down was, ummm... let's call it questionable :)

and the day ends...with a whimper.

we closed above yesterday's intraday lows...im still thinking with the s&p breaking the 900 level, we could be setting ourselves up for a washout next week...hence my cash position.

that said, i bought some VISN at 6.85 or so today...and some CHK and ME near day's lows...natural gas seems to be holding up relatively well with less of a dependence on a global recession in my opinion.

wavesmash - you're a late but clear winner. Hopefully you weren't selling the market down to make your pick look good!

That looked like a technically awful close considering the recent support levels.

Is their an epidemic of nausea going around... or is it just me?

stink bid didnt find a seller. still all cash. hope market rallies for everyone on Monday.

Exciting day...

Money made....money lost...that's life

Have a great weekend Cara community !!

SV

That whole income trust thing was supposedly caused by a dispute between finance minister & BCE CEO over lost tax revenues.

Instead of going Income Trust, now they're trying to burn the gov't another way - privatization with non-taxable entities.

http://tinyurl.com/64ywu4

Let's see what happens?

seamus - are you the same seamus that posts on capitalstool boards ? If so could you please share some ideas on exchange traded bonds ? Your CHSCP idea worked well for me so far in this carnage, I'd like to hear more of the same :)

I dont think job cuts have even begun. My current company is prob going to do some trimming before new yr. My clients just asked if they can outsource a division to us and let go a portion of their staff.

Not saying equities wont go up but this is the reality I am facing today.

USD holding up but gold bounced back and stayed there/Bid-ask 730/732 now on Globex.

Is this decoupling, or sign of more intervention to originate in Asian markets come Monday morning? I've found it interesting that these last days gold dumping begins in Asia instead of the typical GLOBEX/NYMEX times. Maybe COMEX is indeed facing delivery troubles (whilst TOCOM, on which Goldman is long, is more honest?)

Wavesmash,

I think we need to make a few changes as to qualifications for President.

Age 35 is OK for starters, but we may need to look ahead to test tube babies — is that "natural born'?

Also, anyone serving in the Senate or other taxpayer funded job should resign from that job when running for President. Currently we have three senators AWOL leaving three states short handed in representation. Alaska can do as they wish since we aren't paying her.

I for one, am fed up with election marathons. Therefore I propose anything more than a one month campaign should be deducted from the time we must listen to the new guy living in our house at 1600 Pennsylvania Ave.

After Reagan, G.H.W. Bush and now McCain, I'm wondering if we don't need a cap at the upper end of the age. I will give McCain high marks for endurance. I'm over a year younger and would not be as chipper as he is able to pretend. (And nobody physically tortured me for 5.5 years at any time.)

I still thinking about adding a lie detector test requirement :-)

NYUgrad

That's the wild card that I wonder whether it's priced in at this point... the final shoe to drop... I really don't think it's completely priced in and will present it's ugly head very soon.

The way I see the current situation is that banks do not lend not because they have no money but because they do not want to lend in recession environment. Throwing more money at banks is useless - they will sit on it until they see another crazy opportunity like making mortgage linked instruments.

They are stuck in a classic Nash equilibrium optimizing their individual survival chances - that is forcing governments to continuously replenish their reserves while supporting market panic. It is much easier to do than to finance any economic activity.

What is needed now is a big subsidized project that will do good for world economy in general - something like alt energy. IMHO by directing trillions of public money into these projects the world economy can be revived. They should be forced to compete on the productive fields like that rather that pay talking heads for more panic news.

Sorry for the following tirade, but squabbling over loses or gains and who should take credit for their insight or foresight misses the point entirely in my opinion.

As BIll has so eloquently stated, all of us are witnessing a raging battle reflected in the markets. But it is like watching a battle ocurring at the bottom of the sea from the sea's surface... bubbles bursting unexpectedly around us as the refuse of a conflict far below bound to the surface. We cant accurately predict what caused the bubbles, nor can we say with certainty what damage has been done in their origination. We cant because these markets have no transparency. The field generals are issuing unseen orders from behind closed doors directed at disrupting other generals behind even more closed doors. The foot soldiers issuing their buy and sell orders or reports have no concept of any ultimate overiding strategy; they only act on their respective general's orders... can their be any other explantaion for the idiocy spewed on FET, or the insanity of the FED's recent actions and the actions of the PPT?

No offense, but this conflict has been very very long in the making, and to those of us who've studied this topic, it is quite fascinating to witness the culmination. We are literally witnessing the repercussions of colossal blows delivered by competing unseen hands that have vyed for power over the world's populous for generations upon generations. It is not about the money... they already print that on a whim. This is about control. They have herded us to the door of the slaughterhouse and now that we are here, thankfully, I think things are not going according to plan. The lords of chaos are exacting their fee.

I anticipate this war will continue to rage for sometime while the observable repercussions continue to disrupt our lives in both predictable and unpredictable ways. I hope the battle continues to be contained within the realm of finance and is not permitted to spill into physical fisticuffs....
For me, inconvenienced and relatively impoverished is preferable to world conflict and death. I also hope that by observing this battle, the general population of the planet gains some insight into who and what has been exerting an over-reaching and malignant control over world events for too long. I hope that these agents of control not only expose themselves, but destroy each other, or at least weaken each other to the point that they become greatly diminished. In their weakness, I hope we find strength; strength enough to recognize the limitations of voluntary servitude and decide to disgard the systems that perpetuate this enslavement once and for all. In so doing, we may take back what is rightfully ours... our future and our finances.

I am a firm believer in the following sage advice; we are the market and the market will survive.

Take care Shark.

The market was interesting today, but so was the soap opera.

Sometimes a kid gets so disruptive or abusive in class that you just have to send him off to special ed or somewhere, bright though he may be. When schools were actually able to do that, they amounted to something.

I can't imagine the challenge it must be to write a (free) blog for experts and neophytes alike, knowing that, no matter how many times you explain your mission, some of the latter (and even the former?) will think of you as a stock picking service and will blame you if their picks don't turn out. Throughout Bill writes with a confident authority, yet also with modesty. He doesn't even KA-CHING anymore.....it's been years now....likely out of consideration for guys in the audience who KA-PLUNK at least as often.....I mean, you can't teach people if you even give the appearance of boasting.

The fellow who was upbraided today KA-CHINGs a lot. Heavy on the testosterone. Too bad. He has a lot to offer, as some have pointed out, but you have to be civil.

ocam_razor

capitalstool boards? No. Sorry. Most of my trades are equities.

However, I usually purchase bonds (mostly munis) through my broker and hold 'till maturity. I've infrequently commented on this part of mkt here and on skype.

Glad CHSCP has worked for you. I still retain position. Like the fact CHS recently invested an additional $76.25 million in Multigrain AG, a diverse Brazilian agricultural joint venture company.

Fixed income? Recently mentioned NRT, a European Royalty Trust, NJ address. Nat gas & Oil royalty out of Germany, trades on NYSE.

"Widows and orphans" fixed income play.
Not a lot of volume. Have to complete an additional form for royalties at income tax time. Closed at 26 today. Currently paying @ 14%.

Disclosure: I have no position, but have purchased for some conservative accounts looking for income.

However, note people can get shook out of this in a down market and recently did; can also be influenced by price of nat gas and oil. so it moves more than a preferred like CHSCP. Hit a 19 handle in the last 2 weeks so royalty payout % was even higher. Have followed since the late 80's. DOYDD.

Good evening all,

Bill, no need to explain yourself to anybody. This is your house and as NYUGrad says, it is a privelege to be involved.

I have a (naive?) question to the group: if the 'general agreement on currencies' comes to fruition in the name of aiding the stabilization of the current turmoil, would this be the end of currency trading? I'm just starting to get really interested in this topic, but do not want to spend time studying it if the field dissappears (although I'm sure that the concepts are adaptable , inter-related to other areas of the market, commodities, etc.)
It'd be great to get an opinion on this.

Talking about, weighing in on, giving your judgments of, a guy who is prohibited from responding, is pretty weak in my book. Everyone seems ready and eager to put forth some opinion, which they, for some reason, seemed to have held back when he was present and capable of responding to those opinions and judgments.

Weak. I'd use words like "gutless" and "piling on" but that's going a little far. I'll just leave it at "Weak. Very weak."

capitalstool ?

Is that another word for the U.S. Congress ?

"The fellow who was upbraided today KA-CHINGs a lot. Heavy on the testosterone. Too bad. He has a lot to offer, as some have pointed out, but you have to be civil.
"

I for one do not make any judgment of character on a person based on his ability to call how the markets will go up or down form one week/month to the next. I have stopped believing that anyone has that power a while ago - perhaps on very short intraday time frames, some TA analysis could work. So whether the one speaking KA-CHINGS a lot has no bearing on me.

I'm not going to have more respect for a person because he's won the lottery four times. But I will if he can thoughtfully demonstrate and prove a flaw within said lottery system which gives him an edge.

That being said I look forward to a cleaner, healthier board.

Bill - In addition to the new features that you have planned for screening for posts, could you add the ability to pass over ALL posts that contain certain words (such as "shark") in the text? Just one's humble desire.

Thanks.

[Bill Cara note:

I forwarded this request to Jeff.]

Excel spreadsheet downloads on various criteria are available at this link for those looking for certain stocks such has high dividend utility, or nanotech, or ??.

http://wallstreetnewsnetwork.com/

occam_razor

I believe that your concerns about banks not lending bailout money lead some of the European governments to specify voting rights in the bank equity shares they bought. I'm not a fan of the government running my bank, but it sounds like a way of compelling banks to lend the money rather than sit on it, and to prod them into buying the shares back from us taxpayers asap.

As always, our government made the worst choice: (i) do the bailout, (ii) structure it so it benefits the plutocracy.

TCK, TCK/b.to

Just noticed, on the TSE the stock was about 12.25 at the close, but there must have been huge buy on close orders, as the adjusted closing price is $13, and looks like several 100K shares changed hands.

Checking the US after hours looks like a similar little up tick.

Might be something to do with the closing of the Fording Coal deal.

I am sad to see the ouster of Sharkie. I agree that he was insulting and offensive in his email this morning, and I do not question Bill's judgment in banning him. I myself took offense at what he said to Bill. Bill knows what is best for this blog and the community that it serves. However, just on a personal note, I always enjoyed his posts even if there was a little braggadocio at times, and I felt he had a very good feel for markets (not that I'm any kind of expert). It also seemed like his writing directly benefited from this blog and from Bill himself, and got more subtle and perceptive with time. I always read his posts. I believe he was a valuable contributor to this blog. Perhaps he could come back as "prodigal son" or "dolphin attack"?

[Bill Cara note:

Please appreciate that I have no time to manage the behavior of people here or to respond to angry letters of people who complain about some of the things that others write here. I do what I can and sharkie became far too high maintenance. I don't babysit adults well, sorry. Also, I received an email apologizing for my having to delete a couple blog entries from early today. I assured the person that I have not deleted any item from any source including sharkie, today or recently. I also explained that I have no time to look into his comment. With over 600 to 700 blog entries and personal mails I get a day, I read less than half. I do what I can do. But time is the great decider on what I do.]

weekender823 -
Trying to mix private and government finance is IMHO a path to disaster. Keep the private banking separate from government. I am trying to be a pragmatic rather than alter the human nature. Instead of bailing out banks directly give them an opportunity to make money in wealth creation. Create another bubble in the infrastructure - as usual some money will be too early, others will be too late but the world will benefit from a productive bubble in the end as it happened in internet stocks. Why do we have to micromanage bank activity via voting rights vs giving them the opportunity to do something useful for everybody by subsidizing an infrastructure bubble instead ?

Japan and U.S. to the rescue?
As the only two currencies showing any strength over the last while and unarguably the two largest holders of global wealth, how long will it be before they begin to redeploy capital into promising foreign markets? Especially Japan; they must be swimming in cash right now, with their currency at a global premium. Faced with the choice of investing in 1) their sick, demographically-challenged domestic equities, 2) their low-yield treasuries/bonds, or 3) brutally beaten down foreign equity markets in high-growth/value potential markets which are now selling at dirt prices in Yen terms, I know what they'll choose. I wonder where they'll concentrate first? Oil/Commodities in Canada? Brazil? Russia? Australia? High-growth economies like India? China? Brazil?

I have the feeling we aren't going to have to wait for long to find out. When this latest orgy of deleveraging slows I think there are going to be a lot of charts that do a serious about-face. I'm thinking Yen, US$, Gold, Oil, and practically every equity market on the planet except US and Japan.

Understood, Bill. I'm just sad that this whole situation even arose. I feel privileged to participate here, totally respect your judgment, and appreciate enormously all that you have done in promoting social justice on your blog. You are a great teacher, and I say that being a teacher myself.

occam_razor

I absolutely agree with you regarding government investment in intrastructure. My point is that this bailout with no strings attached contributes to the banks using the money soley for their own benefit - as in the first paragraph of your 4:23 post.

Bill: to always be a student of the market.

is to be a wizard ;)

I wonder when the market will loop around and teach unexpected lessons to those who think they dictate the lessons instead

Shark: Ghost of shark... etc

Peace in your travels, may your family have health and more importantly: follow your heart in kindness. In that share to family in helping work through the times. I know you are having troubles finding your own peace in this regard. To lash out to others in pain doesn't diminish pain in the sharing. It reflects back.

Use this an an opportunity instead. To embrace anger is to build walls and limit yourself. Instead it's a chance to be let go and start elsewhere in greater wisdom and direction to what you feel is proper.

Take what you have done and take it where shark dares to go. Good fortune in this.

To Board: On topic of banning, right, wrong...

in end right, wrong, lashing out etc all are stories of the heart on how we define or find completion. No "right" answers exist since it is so relative to each of us.

So this isn't about if shark was right or wrong, he spoke out and perhaps Bill's banning will help him in other ways. Try not to judge, since judgment is always a statement that limits the person making the judgment.

I am not saying Bill was right or wrong.T o do so is to judge and way too much of that happens in this culture. Bill acted to what he felt best.

In the end: he works hard, invest huge amounts of his very nature into this blog, working very hard to maintain a level of respect on this board to what he feel right in his heart. Because of this I return that respect for Bill is working from the heart as he can. This site is a labor of love for him. You know banning Shark actually hurt Bill inside to do so.

Bills' job as site moderator isn't easy and requires hard choices at times. Just as we are taxed by Times, wouldn't Bill also be taxed by the times?

No excuses, just accepting it as it happens, for we all play into this. We each try and I respect knowing that Bill does a great effort to the best of his ability, being a person just like us.

peace

Peace in your travels,

Mtn Gtx

Good post...I agree... a market without transparency is not a market.

Partial truth revealed, the market is now doing it's thing,
ridding the market of excess leverage on flawed market bets. Problem is, the cast of characters or "generals" as you called them are still in charge and have conned and bribed our political leaders in using our tax money debt to bail out their mistakes, as well as doing considerable damage to many who thought they were investing in a market with a level playing field. A perfect example of greed and lust for profits and power.

Though not optimistic, I share your hopes for a better future... I think truth gets derailed many times but in the end... it prevails.

It's been a rough week... Hope all Caraistas have an enjoyable weekend away from the market chaos.

I think TARP gets into full gear next week from this article, anyone know what we can expect?

//////////////////////////////////////

West Monroe Partners Establishes Troubled Asset Relief Program (TARP) Team
Consultants Experienced in Document Management and Financial Services Operations Help Institutions Comply with Documentation, Data, and Collateral Requirements.

Last update: 11:06 a.m. EDT Oct. 24, 2008
CHICAGO, Oct 24, 2008 /PRNewswire via COMTEX/ -- West Monroe Partners, a full-service business and technology consultancy, announced today that it has established a team to address the financial crisis and assist financial institutions in understanding and responding to the Troubled Asset Relief Program (TARP). With passage of the Emergency Economic Stabilization Act of 2008, the federal government will begin implementing the TARP to revive the nation's credit markets and help financial institutions restore order to their balance sheets by purchasing distressed assets.

I just wish I had less guts when they were so foolish to for me to waste, and more left when they were really needed.

Money, too.

2nd Ave.,
My source for Canadian Maple Leaves is Oxbridge Capital,Inc.
2001 Van Ness Ave. #411, SF 94109. 415-409-6086. I talked to him yesterday and there's a month wait for the coins.
Sarah Hadassah

"Craig
Thought you would enjoy this. This speaks volumes about Obama supporters and the far left.
http://tinyurl.com/57b55c
Posted by: Zeto at October 24, 2008 8:10 AM"

Speaking volumes about some sort of desperation..... This is a little sad.
To be fair it doesn't 'speak volumes' about McCain or the "far right" anymore then it would Obama or the "far left" if it were true.
Top Stories
Times Online
Woman admits making up McCain sticker attack, police say
CNN International - 1 hour ago
(CNN) -- A Republican campaign worker who told police she was assaulted by a man angered by a John McCain sticker on her car admitted she made up the report, the Pittsburgh, Pennsylvania, assistant police chief said Friday.
Police: McCain volunteer made up robbery story The Associated Press

Ok... I admit it... I'm in despair. Happy now Mr. Market? Now would everyone else mind joining me here so that we can "officially" label this "capitulation" and get to the end of this cycle?

Shark,

I hope you can find it in yourself to reconcile with Bill. You have been a valuable contributor and I have thoroughly enjoyed your posts. Your wit, experiences, humour and intelligence are evident. I am particularly impressed with your courage to be a contrarian and disagree with the herds. Big picture thinking and seeing many sides of an issue is enlightening. I empathize with the stress you are enduring with your mothers health and I sincerely wish both of you good health. You are one of a kind and I am hoping for your return.

Your rant this morning was utterly ridiculous and unfounded. You owe Bill a very deep apology. You have been allowed a soapbox and forum for your ideas by the founder of this blog and you have developed a following. Bill has showed patience and incredible generosity to everyone on here including you. This blog has been a wonderful collage of shared ideas, experiences and sentiments from individuals spanning the entire globe and each post I gleaned something new.

There are few things in life that are free and that offer value outside of this fabulous blog. We all owe and incredible thank you for the privelege of this unequalled blog experience and to tireless endeavours of its founder!

Life is short ... lets enjoy it.

There are people enjoying inverse etf's. When i was at a steakhouse on park avenue on Wed, the couple sitting next to me were talking about SKF. The woman literally was yelling at the gentleman telling him to buy it before their meals got to the table or else.

I dont think we can rally until money moves out of inverse etfs. the ones i watch are all in bull patterns or classic stage 2 out of base and into a nice bullish pattern.

they are all trading above their 30/50 day moving averages. I need to see them break down thru these moving averages before i get excited about a sustainable bull market. til then this is a casino atmosphere. Maybe the next time i am at dunkin donuts or the gas station, the attendent will give me a stock tip on SKF or QID, that will be my signal. Here are the 37 inverse etf's i watch.

TWM
SJF
MZZ
SDD
SFK
SJH
SKK
SJL
SDK
SH
MYY
PSQ
DOG
SBB
DXD
SDS
RWM
QID
SMN
EFZ
EFU
SDP
EUM
EEV
DZZ
DGZ
EWV
FXP
SKF
RXD
SZK
SCC
SIJ
DUG
REW
SRS
SSG

And no i dont like to snoop other people's conversations but this woman was scolding the guy for being slow to move on the trade. broke my consultative train of thought with my own client discussion.

Net.fishing: Patience... I'm now 110% long (with a 20% hedge). It's as high as I'll go.

Personally, once this is over, a week, month or year from now... well, by God, any other market environment will be like a walk in the park now. Bring it on :-P.

I think I should start selling "I survived the 2008 stock market" t-shirts.

Though a five year slide like this would be... disapointing. Imagine a world where the only ones who can afford to retire are the ones who bought all double short ETFs in their 401k. I shudder at the f* up values such a type of society would produce. Greed is bad, greed preying on fear is just sick.

SH- thank you..

NYUgrad: that's a funny annecdote. And to think I thought the SKF trade was over-crowded four months. Those fine folks better have steel stomachs - when SKF turns downward, it doesn't joke around, as anyone can atest by looking at the charts. In fact I never made money with it as I always the elusive one-day spike that makes it so good.

SKF is also exceedingly unrealiable. It almost completely stopped tracking the financials reliably when the short ban was put on. And, finally enough, SKF crash down when the short ban expired. Maximum confusion.

There's a shorting bubble developing imho. Joe Sixpack is piling on in short ETFs.

Muzie

I too am long... all the more reason I voluntarily offer my capitulation sacrifice to Mr. Market. My real fear is that he most likely won't buy into my dribble and plans to prove it very shortly...

"Greed is bad, greed preying on fear is just sick"
and of course this is the current new national (global) pasttime...

Vad,

With all due respect, your comments regarding Ayn Rand indicate to me that you did not fully understand her message. Mr. Fuld is exactly the type of businessman (collectivist) that she would describe as being part of and responsible for the destruction of the capitalist system. The type of businessman who succeeds not by his skill and competence but by being in the inner circle of Paulson and the Goldman Sachs boys. In fact, the collectivist propaganda media will then say exactly what you did, this man is an example of the greed of the pure capitalist system.

On the other hand, my opinion is that someone like Bill Cara represents her ideal of the capitalist businessman. A man who succeeded in the world of business due to his own skill and hard work, not by kissing up to some government bureaucrat. In so doing I bet he created many jobs that enriched the lives of many people. At some point, he decided he had made enough money to support his needs in life and began to focus his efforts on helping others and giving back to the community. In my opinion, this is the type of person that succeeds in her world of pure capitalism and does end up creating a huge amount of trickle down (just look at this blog). In the collectivist world of Mr. Fuld, all we get is trickle up, exactly as Ayn Rand described. I think if people truly understood her message, the political and business leaders in this world would seem a lot more like Bill Cara than Mr. Fuld.

Clearly, this is a little off topic and too broad a subject to clutter the discourse with. I did mention it though because it struck me as a little odd that you of all people would be confused on her message. I wonder if you ever read “We the Living” and she does have a book called “The Virtue of Selfishness” should you be interested in pursuing the subject further.

I hope I was not offensive with this remark. Always enjoy your comments.

I was just about to say something very similar Jesse.

Of course Ayn Rand's philosophy depended on most people being Moral and virtuous(much like our founding fathers' philosophy of self-governance).

And not compromising on principles was very important to maintain the integrity required to make the right decisions.

So, in Greenspan's testimony he admitted he could never live up to the moral ideals as he had to compromise them while he says at the same time that he thinks we were doing great with no FED and a Gold standard. What a hypocrite.

Rob.

net.fishing...you sound like you're half joking, but let me share a mental 'trick' that seems to work (at least for me)-

we've all had a few incidents in life where we are faced with a situation that requires us to shut off our emotions if we are to cope successfully...usually it's a rather brief encounter, but they can be extended situations too...

mine:

(a) being swept into the deep end of a high school swimming pool when i was 6, and finding myself drifting to the bottom-> for some reason, i was able to 'accept' a drowning were that to occur, which immediately relaxed my body, and it wasn't more than a few seconds later a lifeguard pulled me out...

(b) watching myself skid straight towards several stopped vehicles on I-94 during a snowstorm-> once again, mentally 'zoning out' allowed me the presence of mind to maneuver successfully away and continue on...

(c) twice on the streets of LA, i had to bluff my way out of 'situations'...the only way i was able to pull it off was to 'bluff' my own mind out of fear...

(d) playing ball- to come from behind, sometimes way behind-> the only way i know to pull this off is to mentally block out the score and get myself into a playing 'zone'...

(e) public speaking- who the hell isn't afraid of public speaking? i handle it by mentally blocking out the emotional component...

(f) having a position move against me when trading-> we all have our own coping mechanisms...this is not the first time i've been down 25% in a year, and who knows how much more of a hit i might end up taking? but disengaging my emotions makes perfect sense, as it's the only way to fully engage my decision-making abilities, which is how I recover...

we all have short-cuts to arriving at different mental states-> going back to (d) above: for some reason, watching roger staubach come from behind countless times on TV in the seventies just led to an imaging short-cut for me-> all i have to is visualize staubach down 21-7 with 5 minutes to go, and whatever it is I need to do becomes clear to me...i know it sounds funny, but it works for me...there is nothing funny, of course, about this market-> it's been a month of constant pounding, and all i have to go on is instinct and my faith in playing against the crowd...but at least i know i'm making (for me) an informed decision, and not an emotional one...

GL...

here's something else that may help...we've all read this, of course...but read it again, as it's really meant to be read on the downbeat; takes on a different tone when you're down and out ...i stopped it after the 2 and 1/2 stanzas that resonate with trading…

"If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you
But make allowance for their doubting too,
If you can wait and not be tired by waiting,
Or being lied about, don't deal in lies,
Or being hated, don't give way to hating,
And yet don't look too good, nor talk too wise:

If you can dream--and not make dreams your master,
If you can think--and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build 'em up with worn-out tools:

If you can make one heap of all your winnings
And risk it all on one turn of pitch-and-toss,
And lose, and start again at your beginnings..."

it may sound trite, but it's not-> it's like reciting the Lord's Prayer when you really mean it...;)

These are the gold miners with positive moves today. More information at:
http://www2.barchart.com

GOLD RANDGOLD RES LT 25.75 +2.30
AEM AGNICO EAGLE MI 26.00 +2.26
GG GOLDCORP INC 17.01 +1.62
ABX BARRICK GOLD CP 19.89 +1.08
KGC KINROSS GOLD CP 8.81 +0.86
NEM NEWMONT MIN CP 23.82 +0.52
HMY HARMONY GOLD MN 6.57 +0.41
EGO ELDORADO GOLD C 3.21 +0.29
AZK AURIZON MINES L 1.35 +0.21
AU ANGLOGOLD ASHAN 15.10 +0.15
TRE TANZANIAN ROYAL 1.84 +0.08
IAG IAMGOLD CORPORA 2.66 +0.06
GFI GOLD FIELDS LTD 5.31 +0.06
IVN IVANHOE MINES L 1.94 +0.03
------------------------------------------

Bill - Thanks!!
and BTW, all the nurses at the hospital where my wife works got a chuckle from your "freaking feel better-Dr Phil" humor tale.

2nd_ave - re: mental trick. Been there; done that on several occasions - only the details are different in my case, of course. It works.

Agree with Bill; you must be quite a person, but enough of that. Cheers.

Like many of us who aren't primarily day-traders, I've got a daily ritual of researches I do each evening to try and keep on top of the "action". Market Summary@stockcharts, then Commodites and currencies@INO, this blog, Bloomberg headlines, Cox's podcast(on Fridays), etc, etc. In this way I try to formulate an understanding of where we are, where we've been, where we are going, and what "play" is controlling the action.

Anyway, one of my stops is various stock/etf screens for technical action. To make a long story short - wow - I have never seen so much of the equities' action dominated by the inverse ETFs as I am noticing this last 2 days. Like NYUGrad, I have an anecdote from today, overhearing two secretaries at work nodding in agreement that it was probably a good time to redeem all their RRSP mutual funds and buy into this great fund called a BEAR ETF. I was just about sick to my stomach, but held my tongue. This pillaging of Ma and Pa is getting a bit long in the tooth. Surely these are all further signs of an impending turnaround? Now we just have to find the confirming signals and allocate appropriately.

2nd_ave

Your correct in your assessment: "you sound like you're half joking" just as you have kindly pointed out, most of us have encountered various adversities of an extreme nature at least once during our lives and have developed coping methods that we rely on for strength. I suppose one of mine is, with an understanding of the seriousness of a situation as to how it affects myself and others of course, I search for the humor in it at my own expense and not at the expense of others. In spite of my life experiences I consider myself fortunate, and with that said, I don't place myself on a pedestal. I make a habit of laughing at myself daily... before anyone has the chance! Thanks for the feedback.

Ayn Rand's fictional works deserve a lot of thought and a place on every thinking persons book shelves, imo, but perhaps I was already destined to choose her way of thinking. In any case, those who decide to read some or all of her works might also enjoy Orwell's "Animal Farm" and Richard Adams's "Watership Down" - both are quite enjoyable animal tales with a message.

Everyone here probably already know that "The Wizard of Oz" is an allegory about the political moves on Gold during The Depression.

Cheers.

spot- Cheers..

Mackinaw - That "Bear etf" must be BEARX mutual fund that has been around for years and can be bought in an IRA. It specializes in shorting stocks in bear markets (and possibly hedges some with gold, I don't remember now). It is respectable, imo (I've owned it), but timing is always an issue with anything.

I also see your point - secretaries buying a "short" mutual fund now might in itself be an indicator.

Mackinam, re: bear etfs

These are indeed good signs - you know what they say, when the a certain investment trend becomes mainstream it has already died.

I do wish I knew what was going on, exactly. I mean, yes, apparently the idea is it's "deleveragin". But the way it's happening seems peculiar. Why the intermittent enormous gap downs? And the 5-6 "falling off a cliff" moments, only to be subsequently moving up later? And why is the last hour always so crucial, up or down?

It's like I'm watching a match of chess between two chessmasters, and I know I will be able to tell the winner by which king is checkmate, yet all the other rules of the chess have changed and are unknown to me. I have placed my bets that the white king will win based on a diffuse intuition of where this match should lead, but the turn-by-turn moves are undecipherable to me.

net. fishing: Re: Capitulation

I had my capitulation on Sept 19th... I sold all my shorts that day! I was 50%+ short. And, if you take an index chart and flip it up side down, you will see that Sept 19th indeed looked like a capitulation day for shorts. I also read on the TrimTabs report that the money flow in inverse ETFs decreased their assets by half.

So now that I capitulated once and see how much damage I made on myself by obeying that instinct, then I'll probably be die with my stocks in my fist if I have to rather than do it now only to have the same thing happen again. Call it negative reinforcement.

occam_razor,

What's to stop another Big Dig from eating up all that government slush and toppling on people? Or another Large Hadron Collider breaking the stock market?

Coincidence that market plunged in Sept & that thing was turned on?

http://tinyurl.com/6k75qd

http://tinyurl.com/6pktef

I think not. :)

How did the Large Hadron Collider cause the biggest stock market crash in History? (Yahoo Answers)

http://tinyurl.com/6pxrf4

I hope somebody buys Yahoo Answers and Yahoo Finance if they go under. Could have got Yahoo shares for under $12 today. A co-worker of mine once told me he recommended to his clients to always buy it under $25 and sell it above $30.

$10 is the new $25 I think. Maybe Buffett will put in a bid. I think they have online bridge.

Yahoo placing data center in Omaha suburb despite layoff plans elsewhere

http://tinyurl.com/6ojujb

Play bridge with Buffett

http://www.okbridge.com

Bill,

I have a question that may also be an idea for the new book. A few here have posted how they followed your “buy” signal and are now down significantly in their accounts. Each time I hear this type of comment I think to myself, somehow I bet Bill’s account is not down that much. So, I am thinking there is some piece of the puzzle that we readers are missing. There is something that a professional trader is doing differently than the rest of us. In fact, I believe you have made the comment that precious metal traders need to keep their finger on the buy/sell button in the minute timeframe. Makes me wish I was a fly on the wall in your trading room. Thus, a real world example of how you traded in the current environment could be very instructive.

I will choose one that is close to home for me. The RSI signal triggered a buy signal for SLW at $8.34 (or thereabouts). Today, it made a low of $2.99. How have you or did you navigate these waters? Common wisdom is one must set a stop loss. Did you have a stop set somewhere and if so why at that value? Did you get stopped out and re-enter yet? Are you still holding shares bought at the $8 range, meaning a more than 50% paper loss? I am still holding shares from the $8 range as well as the $14 range. Clearly, I have made a mistake and would like to learn how to avoid that mistake in the future.

An example like this would be great in the book, but for readers today that have some favorite stocks that they have followed the last few weeks, an example like this would be incredibly educational. Excuse me if this type material was covered in “Lessons”, I received my copy a few weeks ago but have not opened it yet, waiting for my spirits to lift. Right now I am in the stage of I never want to see another PM stock again.

Thanks for all your efforts!

nemo: your 9:27am post was very nicely written :)

On top of what you say, you have to mix in that all too often when reading a statement, what we hear is also mixed with reflections of our own nature.

Jesse- Bill is a trader...last i heard it was 40%/40%/20% equities/put writes/PM...i'm certain the puts he (or CTA) has been writing have been covered and rewritten several times with successive lowering of the basis on each underlying equity...ditto for the PM stocks, except he may be trading those outright...

JesseSLC,

I wish I could draw a picture of what you're "missing". First off, the average long trade is entered on an upturn signal. On average, upturn signals are followed immediatedly by downturns, which are often referred to as tests of support, drawdowns, etc. Thereafter, a successful trade moves up into the green and is held until exited on a downturn signal. As such, the average successful trade will suffer an initial period of being in the red and ends with a profit lower than could have been achieved if you had exited a little earlier. Basically, you can't pick tops and bottoms consistently.

Furthermore, Bill advocates a hedging strategy of involving simultaneous options writing which either produce a lower average cost of entry or provide incomes (others, here, can elaborate on this better than I can because I don't employ it. The only hedges I use are inverse ETFs and then only rarely).

Finally, you have to realize that trading is probability-based. There are simply going to be a certain proportion of your trades that are going to fail, losing you $. One hopes that, on balance you have an edge that directs you, ultimately, into the green on a permanent basis.

That's my take, anyway.

Spot,
"Animal Farm" was a great book as well. It's amazing how much truly good literature is written about the twists of the human condition. I think that's what's so fascinating about the capital markets. They're the human condition magnified.

A novel about living through the 2008 stock market with a bird's eye view of a few different traders and their networks sounds entertaining and could be quite a work of art in the end.

Rob.

Muzie

I understand, but flip that last paragraph you wrote upside down like you did the chart and it sounds like a better plan to me... positive thinking... cause I'm more with you than you realize. Perhaps I can give you a visual description of what I’m talking about: I'm so upside down on my longs that first thing in the morning when I get up to go to the bathroom all I have to do is “spit” and I've taken care of business... if you know what I mean… does that give you a good visual... yeah I know, I'm sorry, I hope you can get that picture out of you mind! lol

Mackinaw- nicely written...

Muzie,

"Why the intermittent enormous gap downs? And the 5-6 "falling off a cliff" moments, only to be subsequently moving up later?"

My guess is program trading and the big dogs methods of unloading their holdings. Unloading millions of positions isn't something you want to do in a day if you have to, it's something you program a trading system to do for you. Dump a bunch, buy a few, dump a bunch, buy a few.

That way you get 10% down weeks instead of weekly 1987s.

Unless you have to get out fast. Then you get what happened to Russia and Argentina this week.

Yen's up 13% this week against Euro. Talk about unwinding carry trade. You could make your year just sitting at the western union trading currencies this month.

"More than $10 trillion has been erased from the market value of equities so far this month. That accounts for about one-third of the total value wiped off world equities this year."

http://tinyurl.com/5qbzyg

We're just little fish in a big ocean of institutional and government money.

Shave a lot, give a little bit back. Cast and reel. Typical casino methods. All we're missing is the ding ding ding of the slot machines.

MPEL dropped a bit more today. LVS... ouch.

Jesse- let me add another perspective to your comments:

(a) "The RSI signal triggered a buy signal for SLW at $8.34 (or thereabouts). Today, it made a low of $2.99. How have you or did you navigate these waters? Common wisdom is one must set a stop loss. Did you have a stop set somewhere and if so why at that value? Did you get stopped out and re-enter yet? Are you still holding shares bought at the $8 range, meaning a more than 50% paper loss? I am still holding shares from the $8 range as well as the $14 range. Clearly, I have made a mistake and would like to learn how to avoid that mistake in the future."

how do you know you've made a mistake? you bought in the AZ, not the DZ...odds are good you ultimately profit on the position...a mistake would be to have bought in the DZ and sold in the AZ, no?

(b) "There is something that a professional trader is doing differently than the rest of us."

not necessarily...he may have much shorter horizons than you, but assuming your position sizes were appropriate and you have the (generally) longer horizons the AZ/DZ system is based on, you may doing exactly what the professional is doing...the risk management undertaken by the professional is undoubtedly far more rigorous, out of necessity (if not from the daily practice/experience seen in all professions)..

(c) "..somehow I bet Bill’s account is not down that much."

maybe, maybe not...somehow i suspect your account has outperformed the average as well...

ALOHA !!

America is an EMPIRE ... It has been ever since WW1, when we first emerged on the international scene as a serious contender to the European power base. Of course WW2 clenched the title and we were crowned EMPIRE when the US Peso was anointed as the World's Reserve Currency, mostly due to the fact that we either held directly of indirectly most of the gold in the World. Well, we defaulted on that gold currency status in 1971 and ever since Nixon declared free floating currencies where the US Peso was "as good as gold" the World has been on a downhill run of currency debasing. Essentially the USDX is still reaping the rewards of EMPIRE and the title of "safest irredeemable paper currency in the World". We have a NATION built on DEBT and the pillars are the fractional reserve based FRNs that we all possess in our pockets, backed by the "faith and credit" of the US government, which is really saying the US TAXPAYER backs the US Peso, the US government only steals the funds it needs to expand its power base.

If you look closely at the major customer base of most Fortune 500 companies you will find one common client or customer that exists on every "cash flow" report! That would be the US government. If the US government ever shrank then many US corporations would take some big hits to their bottom line! So in order for these companies to prosper or keep their head above water during good times and bad times the US government has to always be in expansion mode, just like the US Peso is always expanding in supply. This is really nothing more than the same "welfare" US Banks have been getting lately, just plain old corporate welfare. Think about that. Without US government welfare many US corporations would not exist or would be in much worse shape financially than they are now. In effect the US TAXPAYER is picking up the TAB so that US corporations can prosper! Now this would be more appealing if US corporations actually paid back in taxes at least as much as they get from government, but any quick review of US Budgets would make it very clear that corporations pay much less in taxes than individuals and retirees contribute. Any brief look at the Corporate Tax Rates and you would see the bigger the corporation is the less taxes they pay! The corporations that have the highest tax brackets are the ones with earnings of less than $10mil and really the smaller you are the more you pay! Right away this is an onerous burden on small start-up companies. As a small businessman for many decades I can attest to the gauntlet of Federal and State hurdles you have to jump through to survive. Government in the USA does its best to burden the small businesses as much as possible. Yet go to Panama or Ghana and open a small business and the governments there are begging you to succeed, even eliminating any taxes for the first ten years! Why is the red carpet rolled out for small businesses in Third World countries yet here in America we small businessmen are considered pests that need to be wiped out! I feel like a target for any and all government bureaucrats on even the smallest levels. Just one example ... The State Of Hawaii Ag Dept. In order to get my nursery certified they state that the certification process lasts six months, yet it actually lasted over one year. For over a year I had to drive all my orders into the Hilo airport to get inspected before I could ship them. I had to drive 40 minutes one way from Kalapana to Hilo for a year, almost every day. The latest is the "ink color". Currently we use red ink and I guess because they are bored next year we must use green ink. I have a large supply of red ink that I must throw away and replace with green ink and also buy new stamp pads and stamps. Its come down to INK COLOR now! Whats next? Will I have to decorate my boxes with pretty little pink ribbons? Will I have to put little ALOHA stickers on my boxes? Maybe they'll make me buy AG DEPT hula hoops that I must use while I am working in the fields? When I get inspectors coming out to my nursery they always have four or five in the brand new FORD EXPLORER SUV to inspect three or four potted plants, where they spend about 15 minutes here. They never drive old vehicles. They are always BRAND NEW! Nothing but the best for State workers! Is that a clause in the UNION contract or something?

There is an EMPIRE mentality that exists in AMERICA that is chocking off the most productive members of our society. This bureaucracy forces productivity into entitlement and many small businesses fail in AMERICA. Is it any wonder? This is NOT the AMERICA I once knew in my youth. This is the AMERICA of greed and corruption and the ME FIRST ethics that emanates from Washington DC and WALL STREET. There is no doubt in my mind that this is the product of dishonest money ...

ALL OUR BEST THINKING GOT US HERE!!

ALOHA !!

For the LVS crowd ... I am told by my LAS VEGAS pals that casinos are dropping hotel room prices to $50 per night to attract tourists/gamblers! It appears not even that is working !!!

wavesmash,

Excellent comments! As "little fish" we perhaps don't appreciate how the market-makers have to be careful with their actions lest they ruin their own trades. For example, I think it's recognized now that the rapid unwinding of that rogue French trader's positions partially caused the chaos of mid-January this year. Also, I remember being struck by the sheer monotiny of some trades Bill Gate's managers were executing in the selling of MSFT and buying of a certain Claymore Real-Return fund. Just day after day after day of selling blocks of MSFT and buying of the RR fund.

thanks for the info, kaimu...that would work for me..;)

..but at least now i know i'm not really gambling, i'm simply "a student of the market..intent in learning crowd behavior and way that markets work."

ALOHA !!

A few years ago the CALIFORNIA DEPT OF AG was notified of "coqui frog" here in Hawaii and warned that this could spread to California. The State of California's reply to Hawaii was that they believe the coqui frog was not a threat since it would not survive in the California climate!

BS idiots ... San Diego is perfect weather for coqui frogs!

Now I get this from the California Dept of Ag idiots where they have changed their minds. Yet another hurdle for me, a small business owner. Why? Because the Hawaii Ag Dept is so concerned about California that they don't even care what comes into Hawaii. This coqui frog is a perfect example as it was imported by palm growers from Puerto Rico. The Hawaii Dept of AG was notified of coqui frog infestation over five years ago but did absolutely nothing! NADA!!! These people only react when the problem gets out of control and then it is too late! The State of Hawaii Ag Dept does as little as possible to police invasive species entering Hawaii. They are a disgrace and I believe the entire US Ag Dept should be eliminated so the Hawaii taxpayer funds stay in Hawaii and not in LOBBYVILLE USA! The central government idea sucks! Let the States have control over their own tax base.

This is what I got from Hawaii Ag today ... Complete buffoons are in charge of everything!!!! What freedom? What free markets? COME ON ... GET REAL!!!! Its the USSA!!

READ ON:
Hello All,

The purpose of the attached letter is to inform all certified nurseries of rule changes by California Department of Food and Agriculture which placed coqui frogs on their restricted animal list. If you have any questions, contact me by phone of email.

Kevin Horiuchi
Nursery Specialist

Bill Moyers - West Virginia - US Coal companies have been lobbying congress to remove waste pile dumping restrictions, essentially allowing them self regulation for disposal, even directly into rivers. The requests have been granted prerequisite to public comment.

Rescue package has now reached $8,750 per household; the masters of the universe are doing just fine, thank you! Is the well permanently poisoned?

Thanks for the replies. I think they make me realize the importance of using option strategies to lower downside risk or scale in and get shares at a lower price. There really is no simple answer to my question because everyone's situation and time scale is different. Also, Bill has made his overall strategy known so there is no hidden potion.

I agree with you 2nd that buying in the AZ should pay off in the long run. Hopefully those shares I bought today at $3.20 will make up for those I bought at $14 in the DZ.

Somehow today, when I look at the 3 year chart of SLW it looks so obvious to me that my $14 shares should have been protected with a stop just over $12 and shares bought at $8.50 with a stop under $8. It is always so easy in hindsight. And of course the emotional failure, how can silver go down when the banks are collapsing? Got to drop those attachments and learn to dance.

Kaimu,

LVS should get the mailing list of hotel clients off the Sultan of Oman. Apparently he ruined Christmas for British tourists. :)

http://tinyurl.com/5zuhpe

"Sultan Qaboos bin Said Al-Said of Oman is not likely to win any popularity contests among British travellers this week, after he cancelled thousands of Christmas bookings in Muscat's leading hotels so he could move the date of a conference.

The decree sent out to the hotels from the Diwan of the Royal Court this week that the Gulf Co-operation Council Summit (attended by bigwigs from all the other Gulf States) was moving from late-November to Christmas week, left no room for negotiation or protest. When it's Said, it's done in these parts. That's what comes with being a Sultan."

http://tinyurl.com/55t59o

"Oman immune to financial crisis"
http://tinyurl.com/55t59o

Why don't people realize that when you speak up about how sound your "system" is people are going to try to rattle it... human nature.

"Muscat: Despite assurances from top government officials on the insularity of Oman's financial and investment institutes from the global financial crisis, the Muscat Securities Markets (MSM) slumped for the second successive day yesterday.

The MSM 30 Index was down by 171.31 points (2.36 per cent) as every sector went down, with the banking industry suffering the most. "

http://tinyurl.com/62rzrt

According to http://www.emerginvest.com/WorldStockMarkets/

They're the worst performer this week and Canada (Venture Exchange) isn't on the list. yay.

XGD.to did fairly well today. Waiting until later next week to see what transcribes.

In terms of gambling vs. trading, I think following the RSI system and some of Bill's teachings has us in the middle.

"Arbitrage betting is a theoretically risk-free betting system in which every outcome of an event is bet upon so that a known profit will be made by the bettor upon completion of the event, regardless of the outcome. Arbitrage betting is a combination of the ancient art of arbitrage trading and gambling, which has been made possible by the large numbers of bookmakers in the marketplace, creating occasional opportunities for arbitrage."

Isn't our goal a risk-free (or low-risk) bet?

Doesn't really matter what you call it...

Oversold? Buy signal. I don't think this works when large positions are being dumped, smaller positions purchased, just to dump more large positions.

Buy, Hold and Prosper?

Lee-Chin's AIC Fires 53 Workers as Investor Withdrawals Rise

http://tinyurl.com/6oqfcq

"AIC's assets shrank to C$4.6 billion ($3.6 billion) last month from about C$14 billion in 2001, according to the Investment Funds Institute of Canada. "

Lee-Chin's is quite the inspirational story. I read somewhere he got started selling mutual funds at yard sales.

http://tinyurl.com/6pukza

Tough times... Company should have placed those workers with the Fedge Fund. Better PR.

USAJobs - Treasury TARP
http://tinyurl.com/69etwj

Kaimu,
You're so right. I'm tired of people disparaging free markets when we have nothing of the sort. A true free market rewards companies and people providing superior products and services and not the people buying influence and peddling garbage. I attest that none of us have ever seen a truly free market and would be astonished at how well it worked if we can ever evolve far enough to have one.

It doesn't seem that hard to me. Integrity, honesty, and punctuality are rewarded and lying cheating and buying influence are discouraged.

What the media wants us to believe has been self-regulation and de-regulation has actually been monopoly-making. How else would you describe being able to write the rules for your industry?

Rob.

JesseSLC re: stops

I have achieved a certain peace of mind recently by abandoning my implementation of strict stops. In an accumulation phase, for me, which began late September, I started with really strict stops based on chart-technicals. The rapid rise in volatility led me to then determine my stops based on increasing forecasts of ATR (e.g. allowing -3XATR, etc.). Some of this regimen saved me some $ based on mark-to-market accounting, but overall it was eating me alive: each trade was losing me $1000, based on my position size strategy. Several ideas I had encountered started to resonate. One being a video interview I had watched of Vadym describing how he got to a point in his trading where he didn't need to account for each trade in a ledger to know when to execute an exit - he just knew it was time. Another was the realization that there comes a time when one has to trust one's judgement of the fundamentals of a trade. After all the model is there for all of us long-traders: Buffet. I know, he's becoming a bit of a caricature and he's definately a more complex trader than the general public knows but I don't doubt his overall tenet: buy low, hold, and profit.

As an example, I bought BA at about $46 on Oct.13 and it's traded as low as $40 since then. Employing my earlier super-rigid stop-loss ideas, I would have been out of it with a $1000 loss. Nevertheless, I feel very comfortable that it has the potential, in this market, of becoming profitable very quickly. The only reason I might exit is if I thought the upside potential was not there relative to some other asset. I might be being stubborn but, anyway, I'm not investing the rent money here - this is discretionary income that needs to be put to work.

Perhaps the next big bubble will have to be infrastructure. USA is a distant 14th worldwide, and basically hasn't invested much since the mid 1970's. I'm thinking equipment, concrete, asphalt, steel. At some point nuclear also.

Mackinaw - Buffet also gets deals through preferred stock, etc. which you and I could never obtain.

Selective regulation!!! Bring it on!!!

true 'nuff, CP. But I think his recent deals are a bit extraordinary. I was thinking about his equity investments before the last year or so. Anyway, if you are on your toes, preffered deals have been there for us "Joe-Sixpacks" also, see for e.g. PFF @$19.00
http://tinyurl.com/5d7qwq

Talking about bubbles I am not sympathetic to them. It just appears to me that pretty much any major economical advance is associated with a credit bubble. Austrian school followers advocate a lot of small bubbles (probably a good idea except for large strategic projects). Keynesians achieved nothing but time and size extension of a bubble cycle so now the bubbles are not popped until they get to monstrous proportions.

From a pragmatic point of view if we can not live without bubbles as it is inherent in human nature then we can at least try to direct them into something strategically important for the world economy.

I think the internet bubble was "important" for the world economy - there's no disputing that it's changed the world and arguably for the better. I also think that the US real-estate bubble was important for the world economy - millions of Americans are now home-owners who wouldn't otherwise have been.

PFF - Nice! Too bad I'm broke! Well, at least until the DOW turns. Wish in one hand.... you know the rest.

Mackinaw - How about WEE?

WEE on the Canadian Venture exchange?

Sorry, I meant WWE!

haha! I think I remember seeing their promoters on Cramer's show one night. Boooyah!!!

Chicken - I've been a big fan of nuclear power and especially the concept of fast breeder with integrated fuel cycle. These can effectively address one of the few key issues - radioactive waste disposal by (i) burning long-lived isotopes and (ii) by more than tenfold increase in energy generation per load from breeding. Even though these reactors are now considered generation IV the underlying technologies have been proven decades ago so it is more of a large integration project rather than risky fundamental research.

hi all...

i have a question, it may sound stupid but i hope someone can clear my doubts. Thanks in advance.

when i'm expecting price to rise, i will long a call.. however, i remember bill said something like shorting a call and get the premium... how does this works?

Thanks again

Imagine an industry begging the government for money and then trying to lobby for mandatory participation so they could hide their own worthless balance sheets. Does that sound like a free market?

It makes me think Wells Fargo may be the only healthy one of the Gang of Nine as they balked at the idea of selling to the government but eventually caved for some reason.

I wonder if any insurers will hold out.

http://tinyurl.com/6mxnj7

"A group of insurance companies -- primarily life insurers -- asked the Treasury earlier this week if they would be eligible to participate in the program, said an industry official with knowledge of the discussion.

Some life insurers have asked the government to make the participation of life companies mandatory because firms don't want to identify themselves as needing funds, the person said."

Rob.

Hey, I was serious about WEE, rock-solid div, top 200 by Forbes, look closely if you're looking...

occam_razor - I can see it happening sooner rather than later, any fast-breeder leads (Westinghouse?)? Anyway, they're coming and I intend on being prepared.

Chickenpookie

Good call on infrastructure, the question is when will it happen. Infrastructure is a huge issue all around the world, particularly in the emerging nations and the rusty nations (sorry that includes the US). Perhaps Obama will take a leaf out of FDR's book and re-invigorate your country through reconstructing your infrastructure, ie bridges, highways, ports, electricity grid, etc, etc. As a theme this makes sense but how often do we envisage good themes but never see their birth.

Not wanting to relate this month to the Great Depression (as everyone else is) but larger depositors were given preferred shares in banks as opposed to their cash when money became scarce.

I read this in Fischer Black's biography today. It worked out well for his grandfather and the bank in the end.

Marianna Rosalind Fischer Black (his Grandmother)
By Stanley Warren Black, III
http://tinyurl.com/5elz3g

FISCHER BLACK AND THE REVOLUTIONARY IDEA OF FINANCE
http://tinyurl.com/5kpw2p

Understanding Fischer Black
http://tinyurl.com/67m8bn

I think Ponzi also made out well with preferred shares back in the '20s (he bought a bank). Highly recommend his biography.

http://tinyurl.com/2s72n

"The truly experienced con will balance these two factors ( payout period and promised rate of return ) against the expected duration of the operation so as to maximize his take while still maintaining some semblance of credibility."

Sounds a bit like options pricing to me, just add in "volatility". :)

I just got offered preferred shares in a large bank here via bought deal, and I'm no Warren Buffett.

"Treasury Offering of Non-Cumulative, Perpetual, Rate Reset Preferred Shares via Bought Deal"

Yahoo Answers comes through again. Looks like somebody else got the memo too.

What does "Non-Cumulative, Perpetual, Rate Reset Preferred Shares via Bought Deal" mean?
1 day ago - 2 days left to answer.

http://tinyurl.com/638bvz

Only $25/share. Not as good as Warren's $18 entry point in GE, probably worse terms, but I can get GE cheaper today too.

My one share of BRKB isn't holding up as well as I'd like. Back to where I bought it a few years ago. Oh well...

Chickenpookie - I think places like China and Ireland took that bubble out of the hands of the US a couple years ago and are fighting hard to keep it.

Doesn't seem to be helping construction: CAT 10-day volume almost 35% higher than 3 month average and it doesn't look like upward volume...

I wonder if TARP team will be reading some of Black's essays? Hiring period is last week until January 31, 2009 so they should be around for a bit.

From Fischer's biography (name spelled wrong?):

"Like Fisher, Black went on to build a theory of money (1970) and business cycles (1981, 1987) on
these earlier foundations. Black’s account of how a gold standard might be used to stabilize
prices (1987, Ch. 11) makes explicit reference to Irving Fisher’s similar plan (Fisher 1920)."

"Even Black’s proposal for a new system of accounting (1993c) can be read in part as an
extension to the case of uncertainty of Irving Fisher’s treatise on accounting The Nature of
Capital and Income (1906)."

I'm trying to find a copy of his 1970 essay "Banking and Interest Rates in a World without Money: The Effects of Uncontrolled Banking"

History probably repeats itself, though past results don't mean future returns.

seadog - "how often do we envisage good themes but never see their birth"

Exactly my point, the US must do this or die, no choice! (Includes rail and seaports too, I'm really not hot on dirty ol' coal but ya' gotta eat!)

I too would be interested in hearing a comment on how SLW could have been played reasonably. I looked at the puts the other day, but there was only a very small premium for selling them it seemed. So I bought shares instead around $3.57 (which I thought was a very good price) and set a stop at $3.19, well below the lowest it had been. I got stopped out at the open, and of course, now its higher. It seems whatever stop I set gets hit, anymore. It wasn't a big loss, but if there is a better way to do it that would give me a better chance of success, it might help in future.

Neat google hack.

cache:http://www.billcara.com/archives/2008/10/caras_commentary_community_cha_220.html "bill cara"

There's your highlighting. There may be a slight time delay while the borg of searches scrapes the site.

Chiken - France, Japan and Russia are currently operating FBRs which is one step away from integrated cycle FBR. I know that Russia and Japan have actively work on FBRs. But Rosatom is not publicly traded and I need to check who from the big three Jap reactor builders work on FBRs.

Currently most commercial activity is around so called gen 3 reactors with once-through fuel cycle (disposal issue) but with greatly improved passive / active safety systems and lower maintenance operation schedule.

occam - Thanks! I'll post what I find, so far EXC is on my mind.

Did anyone catch Joe Biden's comment how the new US president will likely face a manufactured incident within his first 12 months of office? This happened to our last three presidents!

Mackinaw - have you looked at WAB? You'll like this one better, no doubt!

I took a big chunk of cash out of my trading account this summer to build myself a barn for my horses and some much needed storage space. I was thrilled to do the project and had a lot of fun and had been wanting to do it for some time. The market was giving me jitters and the buck was on a downhill slide. I wanted those saved dollars to work for me. I recall thinking that if I didn't take it out then, I would be buying some value stocks instead. Those same stocks are REAL values now and most look like they'll even get cheaper still. I already own some of them and of course I'm taking a hit like everybody else on those positions.

But Bill convinced me in late October of last year (through his daily commentary here) that we had had a good run and that there were cracks developing in the market and it seemed prudent at the time to me to start scaling back with my 401K. I ended up putting it all into the closest thing to cash offered (a stable value fund) almost exactly a year ago, which is still where it's at today. I got a lot of ridicule from friends, family and co-workers for that decision because I seemed like an alarmist to them. But Bill's thinking only mirrored my own conclusions and I had lost my shirt in 2000 and didn't want it to happen again. Last year at this time, the market felt strangely familiar, casino'ish and toppy to me. I got out at around 13500 or thereabouts and I must say that I'm thankful for that decision now. it saved a very substantial portion of my retirement funds that can go back to work another day. And I'm very thankful to Bill and this community too. Like Shark, I wasn't convinced yet when Bill made the bull call, but that's just because I'm woefully conservative and not a huge risk taker and also not a day trader. But I did start to slowly re-deploy the funds left in my trading account and I bought good companies and have no regrets on them suddenly making me a long term investor. I've been through this process before but with far more speculative companies. My trading account only represents a small portion of my total investment portfolio though and so I'm still about 95% cash overall, am gainfully employed, and almost completely debt free (I have 8 months left on a 0% truck loan and no more mortgage). It's a very good feeling in this environment and this community helps to shape my frugal attitude everyday. I appreciate it very much and I don't like to see it when somebody steps over the line as Sharkie did this AM. But I'll chalk that up to his grief over his mother and leave it at that.

One of my oldest friends called me yesterday that I hadn't talked to since this summer when I was building the barn. Like me, he has been at his machinist job for many years and is quite well paid. He was excited for me then and had just bought a country property and wanted the name of my barn builders because he wanted to build a barn for himself. So I asked him yesterday if he'd done it and he said he likes my builders but that his stock portfolio had taken a huge hit and he didn't know if he could do it right now. He can (he's frugal like me) but he's very nervous. this was a good sign to me because he never paid attention to his portfolio before.

But now that everybody is finally paying attention and panicing, I'm sensing that we may be near a bottom. I don't know for sure of course, just as it's a fool's game to try to exact a top or a botttom, but to me this was a good sign for one. And my friend is well positioned to handle it just fine btw. Even if it takes a while for that portion of his savings to come back to the fore.

jesse,

you are absolutely right in your classification of where Mr fulds belong on that scale. I didn't misunderstand Ayn Rand's message; more than that - I lived for many years in a society where collectivists ideas were taken to their extreme and worked their black magic ruining the society in exactly the ways she described it. Actually, there are a lot of lines and speeches in the book that seem to be taken almost verbatim from speeches and articles of Soviet leaders and media.

What I did fail was to communicate my own meaning, I can see that re-reading my post. Let me try again, hopefully with better success. When you read the book, you get the impression that in order for a "good selfishness" to work its magic, it's enough to get rid of all the regulations. Then it will just take over as a natural order of things. I don't think it's that simple. Another example of oversimplification would be antimonopoly laws and regulations - the book leaves a feeling Rand wouldn't consider the acceptable; I believe they are necessary.

In short, I am a subscriber to her philosphy in general; not necessary agreeing with all the details when it comes to practical implementation.

NYUgrad,
Thanks for the list of inverse ETFs. Nice post. I plugged them into a yahoo panel which helps give a feel for the volume traded (using detailed view). The high volume players I have used get rapid fills with a stop loss; the low volume inverse ETFs might be a bit dangerous to be holding when this market reverses...(e.g. RXD ultrashort healthcare with only 7,238 shares traded).
Regards,
MCM

I have a feeling that with the relative flatness, (pause) in currencies today, and the rise in gold, also noticed my tbt caught a rise, we may well be at a turning point towards a more sane market. In other words, let's take it the other way! And now, no more need for killer whale, I'll go back to being just plain charlie.

Recession or depression.
Let's stop reading comments from others and state ours instead. We're real people with real jobs here after all. From Italy I can say I'm very worried. My company is an indirect subsupplier of CNH for dumpers vehicles. During this year the orders have been always reduced but now they cut the programs by 50% for the first 4 months in 2009! Other companies (customers of ours) are cutting orders for municipalities or even do not have any real order portfolio! Recreational vehicles production stopped almost completely (Italy is the 3rd European producer for that). So, maybe the stocks seem cheap now, but with this level of future orders I am afraid that earnings for many industrial stocks can still fall a lot. Any other comment from you all, or other information? Unfortunately I entered long the market just before the crash more than one month ago. And I see now my slashed accounts. Maybe I trashed a lot of cash that could be useful if things start going really bad now on...

ALOHA !!

Anyone see the correlation? Do you think Buffet's companies sell product to the US government? Do you think GE has some US government contracts? How about LMT? Do you think BA does? Would you guess that MSFT sells software to US government agencies? What about DELL? Would DD? It is to these companies benefit to have the US government grow in size not shrink. The US government growth however is on the backs of US TAXPAYERS and even those who pay no taxes since inflationary prices result from long term extended government spending and the resulting DEBT that is never repaid but forever inflating and debasing. It is not only the bankers who profit, but the bankers profit more directly and we are seeing how much control banks have over our government. The US Banks are well positioned in the money flow to be the first beneficiaries and the disseminators of loans to major US corporations and citizens alike. When you control money flow you control a Nation and that has been visually demonstrated on national TV for many months now! Who owns us ... us ... WE THE PEOPLE? It should be obvious by now ... This is no longer "tin-hat" drama, but reality, brutal reality. I suspect so much reality that most of us still refuse to see it and most importantly, FEEL it! We, in our minds dismiss $700bil as just another government booty call and we go on about our business as if $700bil was 700 fluffy kittens! Really the outrage was palpable when the drama was high during the first vote, but now that the $700bil has been assuaged through our consciousness with the right amount of "pork" applied as if "pork" was the US CONgress equivalent to "KY JELLY" ... the pain gives way to blissful mass dementia and we move on to the important task of surviving the struggle for the legal tender! We all can feel alone but yet we aren't. The first vote that failed in the House gave us a fleeting glimpse of what our Founding Fathers fought for, which was WE THE PEOPLE and our control over government and not the reverse. It felt good didn't it to see the first $700bil vote shot down in flames? The bankers got their comeuppance and we had power again like it was suppose to be all along. Like the US Constitution had ordained it from the blood, sweat and tears of those who fought and won against the British Empire for our inalienable rights, our perfect Union in the pursuit of justice and freedom. Yet now it all seems so far away again ... so distant ... so unattainable as we go into what most People know in their heart of hearts as yet another faux election of the less evil ones. Like the Japanese, BUNRAKU(see definition below), it is that obvious! We are once again back in our assigned pigeon holes ... slaves and serfs to servicing the enormous DEBT begot by welfareism of the powerful. Elite ... it is welfare you feed on and nothing more ... nothing but the corpses of the American Dream are left. Fly on to the next carrion delight ... Lie still and fain no pulse and perhaps they will notice none and move on with mouse click speed. What's left but financial slavery?

BUNRAKU: Japanese traditional puppet theatre, in which nearly life-size dolls act out a chanted dramatic narrative, called joruri, to the accompaniment of a small samisen. Puppet theatre reached its height in the 18th century with the plays of Chikamatsu Monzaemon and declined later because of a lack of good joruri writers.END

To me the definition of BUNRAKU above perfectly fits the crafted and rehearsed platforms and debate performances of the current US Presidential politics. Is it any wonder the "undecideds" have risen in sheer size every four years? You are almost forced to be disinterested and isn't that the Plan A of those who seek to control? Perhaps we should form a new political party called the UNDECIDEDS!!! Like DEBT ATTRITION there is POLITICAL ATTRITION ... Its all so ... IDIOCRACY!!

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

ThriftyBob re SLW
IMHO I would not have touched SLW with a barge pole at this stage. The overall trend is most evidently down so by buying you are trying to pick the reversal, a very difficult thing to do at the best of times. The weekly RSI is pointing down below 30 and the MACDH is going deeper and deeper. I'd be prepared to give up the first few percent in any retracement just to ensure there is a move up. In fact to me this stock looks like one to short on a retracement although it is running out of room down below. Just my view.

2nd_ave,

Thanks for the Kipling "If" reference; Generally applicable and spot-on words, even a hundred years after.

MikeNYC....

You expressed yourself well.

I think most of the drama comments stem from a desire to rally round Bill, rather than meanmouth anyone.

All the same, you have a valid point. Food for thought.

"How many took note of the -170 point drop in the DJIA in the closing 8 minutes on Friday? Do you think that is setting up a locked limit down in equity futures for Monday morning, or do you think it’s a set-up for a rally?"

if i were to guess, they were raising cash for a rally...

Leave Stocks To Buffett.

Plus two stocks to consider buying now (one a Cara 100).

Bill Fleckenstein's latest gloom and doom:

http://tinyurl.com/68v4xs

Have a great weekend.

2nd_Ave.

Geez, Bill's setting us up.

Feels like the "NEXT WEEK...SAME BAT TIME, SAME BAT CHANNEL!!! (dating myself)

Guess we'll have to sit through the commercials.

Ah, if only Ayn Rand understood human nature...that is primate behavior. A noble effort, but unrealistic. Once we start acting out of total self interest there doesn't seem to be a 'governor' that limits our actions.
I know she was big on shunning, so this idea of totally unfettered self-interest isn't exactly what she meant. In that purist sense I know positive and negative reinforcement work quite well, so Rand isn't without social controls.
Unfortunately, her shunning only takes place AFTER the offense. That is where we are now.
Can there be any doubt Mr. Fuld is not being shunned? How about those guys in clown suits in front of congressional hearings?
I have some shunning here for them....

Apparently this point was missed by Mr. Greenspan who must have lived the most sheltered and priviledged life possible. How else is one so blind to human nature?

Seems that RSI weakness list keeps growing.

Date - # of stocks on W, W > M, there are 21 stocks on the list this week.

ABV
AET
BA
CCL
DEO
DIS
EXC
GOL
GS
GSK
IBN
IMO
KO
NUE
OXPS
TEF
TGP
TM
UTX
WBK
XOM

There were 25 last week 4 the week before.

So if you go by the weekly reports RSI lists, the bull has risen again?

Bears going to have steak for dinner?

"If you're right 52% of the time, you're wrong 48%."

http://tinyurl.com/5j4674

Calculated Risk tracks credit crisis indicators which got worse again on Friday.

The yield on 3 month treasuries: 0.80% down from 0.94% (Worse)
The TED spread: 2.70 up from 2.58 yesterday (Worse)
The two year swap spread from Bloomberg: 125.02 up from 117.00 (Worse)
Three days without an announcement, so maybe the Fed is easing up a little. possible progress.
The A2P2 spread is 4.48, down from 4.6. A little better.

http://tinyurl.com/67bqk7

Some notable news & tidbits.

"To save cash amid slumping sales, GM suspended payments to 401(k) plans for nonunion employees beginning Nov. 1. "

No more 401k matching? With the best values the market has ever offered?

"Firms that have not made anticipated changes to comply with the new cost basis reporting requirement will need to review their IT resources and begin implementing new procedures to meet the deadline of January 1, 2011."

What's this included in the bailout bill, originally struck down last year?

"A bill to amend the Internal Revenue Code of 1986 to require broker reporting of customer's basis in securities transactions, and for other purposes. "

Apparently if you don't know your cost basis, you could be taxed as a gain if the stock is above $0 (since your cost basis is ummm... $0?)

Haven't seen much about this one.

http://tinyurl.com/5vtbyx

Above should read Daily > Weekly, Weekly > Monthly (signifying strength?)

re: reading Bill's notes

I'm on a Mac and not too familiar with PCs, but I simply do a "find" and insert — Bill Cara note:

It's quick and easy and works for me.

Bill's question: The answer started in the premkt yesterday with the panic.
Premkt panic...how perfect is that?

Anyway, there was no selling but there was buying off the lows, then there was the open sell off and then back to the base again.
We got off the base and there was a little profit taking at the close to build further off the base.
Also, since it's the weekend it doesn't surprise me that some would get clear of green positions before Friday's close....like I did selling my morning SDS buy AH for $2 more than I could have got before the close.

So in short, I'm with 2nd, I think they are looking to rally.

My take on SLW.
I also got into SLW on the buy signal, but my position was so small that I allowed myself to average down on the first downleg. I bought larger at just under $4 (below Bill's $4.25 level) and lowered my basis enough so that the next lift was a good profit and I sold. At the point of adding my basis was almost $8, my adding lowered it to just over $5.
When SLW pulled back this last time I started accumulating much lower and with smaller positions. I added on yesterday's weakness and my basis is now in the $5 area on my second position. I'm still UW quite a little on this latest position, but there is safety in buying in the AZ during a panic, after an alert.
I would add more at yesterday's lows or lower.

Same for GG. Ask Vinod....we bought on the initial alert and it hurt. I traded around it making a little while raising some cash and then held my smaller position until I could add yesterday in the mid $13's. Now my basis is tolerable and I'm confident that gold and miners aren't going anywhere. This is reflation....I lived through the 70's and 80's, we'll survive this one too...but the $USD may not fare so well.
I'm waiting for 20% plus MM funds....they're coming...

Ditto for GSS and GFI....I thought I was doing good buying GFI at the prev. 52 wk low of $6.30...but keeping initial size small allowed me to add at $4.80 something.

I know we are told by some not to average down, but it is fine if you start strategically small and slowly build especially during bear market panics.

Note that CDS spreads jumped quite a lot on Friday. Indexes don't "roll" until between next March 9 - 23.

A roll of indexes seems to point to increased volatility.

http://tinyurl.com/5ged6n

Blue skies until then! (Or maybe until Dec 20.)

Another interesting tidbit from above article - if a company buys back its bonds it could cause a downgrade! How's that for messed up?

"At certain investment firms, particularly at hedge funds, huge bets are placed on the probability that certain succession events will occur. The bets hinge on which entity a company will use to refinance the liability side of the balance sheet and which entity might have their bonds bought back or taken out. This was exactly the kind of bet which occurred at Cablecom in November. In many cases, these bets have almost random outcomes and are a strategy which we think should be left to gamblers in Las Vegas!"

Happy times.

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

Lelik - It sounds like you are pretty much already aware of the problems your company will be facing in the near future. I was responsible for operations and finance of a small outfit in the early '70s when the oil embargo recession hit the US. I had to learn how to "Zero Base Budget" and how to "PERT/Gann Chart" the essentials, and thus plan downsizing necessary to stay out of trouble.

But, this time IS differnet in that those companies who have both achieved a status of production "on demand" and who are also financed to the hilt will be among the first to go down, and they will then take the supply chain down along with them for others up the line.

When the recreation vehicle sales hit bottom here due to that embargo in the '70s, rec sales never actually ceased altogether, and after a year ofr so, it was like it never happened at all. Hang in there. Farms, mines, and recreation is not a bad combination to be a supplier to. jmho.

Phillies fans...Best wishes to you with Jamie Moyer starting in game 3 of the World Series.

As a former Mariner everyone in Washington State will testify...the guy is a class act.

It's too cool he is finally getting the chance to pitch the big show.
I can't think of a player that deserves it more.

Hedge/Mutual Funds -

Does anyone know where I can find the "dates" for this quarter and year-end? THX. Just trying to figure out how many more days they are dumping the market.

Bull Hunter - Couldn't get your link to function, maybe tinyurl is down?

Posted by: Bull Hunter [TypeKey Profile Page] at October 25, 2008 8:30 AM [link]

c3 - My understanding is Nov 30 is year end, and ~1/3 of the 10,000 hedge funds were expected to sell off.

HEADS UP Gold bulls may want to take a look at this:

http://tinyurl.com/5npzzk

"AIG has borrowed $90.3 billion from the Federal Reserve’s credit line as of
yesterday (Thursday), the bulk of it to pay off bad bets the company made in
guaranteeing other firms"

Question, who received these $90B? Where do they end up?

more than one path to economic wealth-

with a (potentially) prolonged economic recession upon us, it may be a good time to revisit some of the failed concepts of the late ninteties/early 2000s-> Boston, North Carolina, and the Bay Area still have venture capital firms searching for start-ups to back...what they now refer to as the dot.coN era notwithstanding, the dot.coM crash took down many good ideas before they had a chance to evolve and take off...i'm beginning to explore a few over coffee and emails with colleagues here, and i would imagine all of you have your own avenues to explore...down time allows careful and comprehensive planning, and will give you an edge when the money starts flowing again...

there was nothing to convince me of a possible rally for Monday based on the Friday close. A retest of the lows may be in order this week with a possible breakdown of support and continued selloff. I am more curious on how the elections will affect the current situation. Would it be possible we continue to drift lower retesting lows until the Nov.04 election date and have the final sell-off?

INDU: closed the Weekly below the previous two weekly close - any symmetrical triangle has been violated as I see it
RUSSELL_2K: broke support and sitting right above lows
NASD_COMP: another break of support and just hanging on to lows
SP500: same as INDU

SiO2,
That is an interesting question. Who did get that 90B and where can one find a list of the participants? It should be public record since the taxpayer is footing the bill.

Craig,

Thanks. We love Jamie in Philadelphia. Unfortunately, his last two starts were awful. Hopefully, he'll be back on track tonight and we won't get rained out.

CP,

Link works for me. If you still have trouble, try cutting and pasting this:

http://articles.moneycentral.msn.com/Commentary/ByDate/InvestingThisWeek.aspx

Regards

sergio- nor am i convinced there will be a rally...but the market is made up of individuals-> these individuals have, for the most part, been selling relentlessly...there are buyers in the market also, but they seem, for the most part, to have held back...that tells me there is (a) a lot of cash available for fuel, (b) skepticism on the part of buyers, and (c) possible exhaustion of sellers (at least for now)...nothing moves in a straight line and the odds favor a rally, but i can't say any of this presents a convincing argument...

SiO2 - "Question, who received these $90B? Where do they end up?"

Payouts on Credit Default Swaps have consumed most of $80B last I heard. AIG failed because they were writing so many credit default swaps without regulation, and no reserve capital.

Bull Hunter - I went back to your original post and the link worked. TINYURL must've been the problem.

I remember when 3M was a hurting unit because they overlooked the importance of optical storage technology. Their post-it note's saved the day.

Hmm, yeah, where exactly did the $90B go? Let's also ask what AIG's remaining CDS liabilities are and how many more are likely to fail? Hopefully they're not currently writing more CDS policies!

Please don't let them write unregulated Carbon Default Swaps!!!

2nd,

(a) and (b) fit me to a T.

I'm 60% cash and haven't yet made my 2008 Roth contribution but am fearful of having my head handed to me every time I chance going long.

I'll make my Roth contribution next week and S-L-O-W-L-Y put more money to work.

Regards

CP,

Optical storage technology = Post-It Notes.

Too funny !

Regards

CDS's - One thing we can all agree upon is exceedingly large amounts of fraud were allowed to accumulate and somehow the cat got out of the bag.

I wonder many years Paulson.LLC had been working to keep the cat in the bag prior to last year, since before Greenspan left?

Bull hunter - Optical storage/post-it's - Literal translation: A low tech solution to a high tech problem.

Okay, the CDS's are being auctioned off, so that doesn't necessarily indicate default, does it? The auction process is simply a potentially-expensive renaming of counter-parties, right? When/where does actual default occur in this unraveling process... Are the CDS's actually defaulting, or is the process just more fraud. Are we in the infantile stages of what's about to become an HEB (Hairy Enormous Butt) mess? I'm thinking it's all fraud.

Mackinaw,

Bubbles: It all depends whose ox is getting gored.

Internet bubble — No doubt their are distinct advantage which came from the tech revolution. But an awfully high number of jobs were lost in a very short time. The change from agriculture to manufacturing spanned a couple of generations and was mostly limited with national boundaries, but this switch couple coupled with globalization (which it accelerated) killed far more jobs than it created.

I also it could have been accomplished without becoming a bubble — bubblevision it would have been.

Real estate — Not everyone can or should buy a house. This is a piece of propaganda used, IMO, to sell regardless of the ability of buyer to pay.

Having grown up without a phone, with a push type lawnmower, no family car, I can tell you these things are NOT necessities — nor are they a part of our inalienable rights.

CP,
"Rescue package has now reached $8,750 per household;"
I guess you are referring to the cost, otherwise I'm going to need to contact someone since I have received far less than that.
;-)

I Was Wrong! Alan Greenspan:

http://www.youtube.com/watch?v=55-A1-D3MR0

Structured Products - Building in Safety

"Volatility spikes mean we are going back to basics, with the use of dual currency deposits, single underlying equity-linked notes or deposits, and single underlying credit-linked notes."
http://tinyurl.com/5twm9c

Explains the flight to USD? Getting rid of swap agreements and replacing with the actual currency? No more cash flows in different dollar denominations?

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

"In Taiwan, these products have names like 'The Fireball' and 'The Thunderball',"

If these contracts are all offsetting each other, isn't this just moving cash around (I give you a $1 fireball, you give me a $1 thunderball, but only after I give you the $1 fireball)

Gredit default swaps are good for you
http://tinyurl.com/5kzojn

Who's right?
"The over-the-counter credit default swap market needs such an exchange. Over-the-counter markets are too fragile, too loosely regulated and too opaque for such an important financial derivative as credit default swaps. What makes these swaps dangerous is misuse; an orderly exchange would help make them safer. "

or this

"Leung offered another option, suggesting that, as stock exchanges provide some comfort, the market should look to list more products, presumably alongside increased regulatory scrutiny. The response from the audience and fellow panel members was not supportive."

Carl Swenlin - on POG - "Doesn't rule out $300 POG as downside target."

Hmm, is/does this incorporate data which supports/displaces potential for inflation, delta of human sentiment, or intervention? It seems to be from a purely technical standpoint, which from that perspective I might agree.

FOOD FOR THOUGHT: And to reinforce Bill's position, a recent Buffett quote; Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky's advice: ‘I skate to where the puck is going to be, not to where it has been.'”

Allen Greenspan left office because he knew he was wrong.

Grym - Your portfolio was chosen winner of the rescue package sweepstakes giveaway. I'm sure this will reflect in your next statement if not already.

As you know, a huge portion of taxes are typically collected through the mechanism of inflation, one of the most opaque forms of taxation in more ways than one.

SiO2 - Try this - Auction results for 2008: (Credit event fixings)

http://tinyurl.com/6npyca

net.fishing

paraphrase: "... In waiting for the comfort of good news, they are ignoring Wayne Gretzky's advice: ‘[If] I skate to where the puck is going to be [next Winter], not to where it has been [these last few days of Summer].[I am bound to get pretty wet!'”

I'll take the "comfort of good news", but suit yourself.

net.fishing- LOL...in this case, the shot was blocked and sent flying the other way..and to top it off, we both got checked through the glass while looking the other way...but to quote the always quotable yogi berra-> not over till it's over...

CP,

Good one.

I hope the giveaway went to someone in need and not to bailout another fat cat on Wall St.

Hidden taxes:
Being self employed I always paid the Self-Employment Tax which others have deducted from each paycheck as Social Security.

Since I paid it as a line item on every Form 1040, I could see the rapidly rising amount largely due to inflation (and of course congress having spent the money) .

Social Security sounds so benign as opposed to TAX! (I wonder if George Carlin ever did anything with these words. He did a routine with Shell Shock, Battle Fatigue and Post Truamatic Stress Syndrome — each one a bit less harsh sounding.)

ALOHA !!

BullHunter ... Instead of paying into my IRA retirement plan that I can't touch without penalty until I am 691/2 I decided to put my money into paying off debt now. I now have no mortgage. Isn't that also a "retirement plan" since I will need a roof over my head when I finally stop working? To me paying off debt is an "investment" and one that was far wiser in the long run than many other WALL STREET options offered then and now.

I was laughed at by my SF and VEGAS pals for paying off my Hawaii mortgage and business, because they cautioned me that I could have leveraged that money in the stock market or, as they did, in the real estate market and gotten a better return. Now they are stuck with not only losing portfolios and losing "flip this house" stuff(like horrible renters)but some are struggling to keep their mortgages afloat while their entire home equity is underwater!

I could have used that $210,000USD to buy more gold back in 1998 but I felt a debt free base to operate from and a "place in the sun" to retire to was more important! All the high tech sophistication and algorithms in the World and man still needs food, water, shelter and clothing. That has not changed since caveman days!

Paying off DEBT "is" just as valid an investment as buying AAPL at $24 was in 1998! Paying off DEBT is even a better strategy now than buying AAPL at $97!

I tried to explain the concept of DEBT ATTRITION to these guys but they would not listen and now they are living it! Then I tried to explain the concept of gold and fiat money back then and I could not get past their laughter! Some people only learn through bitter experience and hindsight! Many lessons in DEBT ATTRITION are now being served up throughout America right now! We are being forced to revisit the warnings of our Founding Fathers right now! That's no longer up for debate, no longer is it considered "tin hat" ... its now actual FACT! LIVING AND BREATHING FACT!!

TIMES CHANGE ... In the scheme and timeline of America's existence as a NATION times, these times, have turned on a dime! Less than a year ago all the financial and economic "experts" were telling you "all is fine" as Goldilocks ruled the TV!

Fundamentals that support strong growth and economic and financial viability have dropped off a cliff since 2007! Without printing money and US TAXPAYER guarantees the entire US banking system along with global banks would all be standing in line with LEH! Without the exponential growth of US government there would not be a FORTUNE 500 ... it'd be more like a FORTUNE 50!

Fix the money ... make money honest and we have a chance. Give US businesses and citizens a "store of value" for the long term and that's all we need! Everything else is just band-aids and buying time!

ITS STILL THE MONEY STUPID!!

I’m currently experimenting with diversifying my portfolio, not by asset class, but by psychological predisposition. I have three conflicting leanings (I’m probably not alone here): The Speculator wants to speculate in ideas that may take years to play out. Ms. Safety wants to buy and hold equities and forget about them. The Adrenaline Junkie wants to day trade and make big exciting scores. These conflicting goals have caused much havoc: The Speculator buys a stock thinking to hold for the long term. If it then goes down, Ms. Safety gets scared and sells it (because, of course, the position size is too big). If it doesn’t go down, but doesn’t move up either, the stock still gets sold; this time by the Adrenaline Junkie, who gets bored with it.

So I’ve divided my portfolio into three parts: Long, Medium, and Short Term, each with different goals and different risk management strategies. The long-term portion is for the Speculator; I think of it like swells that move slowly through the ocean. The medium term is for Ms. Safety to play the tidal trends. The short term is for the Adrenaline Junkie, for day-trade surfing.

The Speculator gets 30% of the portfolio, and currently holds FXY (that great slow unwinding of the Yen carry trade). As time goes by I’ll eventually add juniors (miners, oil and gas explorers, oil sands) disruptive technologies, alternative energy, agriculture, biotechs, etc. Risk management is by diversification and small position sizes (10 stocks, each 3% of the portfolio). Because of the small position sizes, I won’t sell these in fear, but they could pay off big over the long term.

Ms. Safety gets 40% of the portfolio, and holds DTO and DZZ (because the tide is currently going out on commodities). The tide in equities is currently shifting so with all the churn I’m waiting (safely) in cash. Once a rally is confirmed, I’ll add tech, financials, china, india, infrastructure, etc. When commodities turn I’ll add gold and agriculture, etc. I still haven’t worked out a good risk management scheme here, but am open to suggestions.

The Adrenaline Junkie gets 30% of the portfolio for day trading leveraged index ETFs. Many thanks to bsi87 for his excellent instruction in risk management (which changed everything for me). As he advised, I use 1.5 times 10 day ATR. I calculated the resulting position size for various ETFs based on risking 3% of my portfolio on each position. This is more than the recommended 1 or 2%, but it’s an index ETF so I don’t have the associated company risk. Now I have a very simple strategy: I think of each position as a chip that I place based on the intraday support/resistance of the S&P500. If an S&P support is broken, I place a bear chip. If the next support is broken, I double down with another chip. Sometimes I get wild and add a third chip (but never overnight). I watch the S&P500 only (watch the wave, not all the boats on the wave), and remove and add chips as support/resistance levels are broken. I’m aware of exactly how much risk I’m taking at any given time, and this makes all the difference in the world in mitigating fear and the errors that result from it. I don’t have to watch the screen all day. Currently I have TWM and DUG.
I’m not exactly sure how this will pan out, but so far it seems to be working. I no longer trip over my conflicting inclinations, my fear is mitigated, and I’m comfortable waiting for the tide to turn before buying the rally because when the market finally rushes back the other way, I’ll have at least a couple ETF chips in the game.

If you’re still reading this long post, maybe you’ve tried something similar. I’d be interested to hear anyone else’s experience with unconventional porfolio allocation.

Thanks CP. Interesting site (Creditfixings.com) about WM CDSs settlements on Thursday. Not sure what it means, bids and asks all from the same entity. I am glad not to see any Canadian banks there. Question is still that $90B are now with someone else, who?

Looks like there is more to come from AIG still (e.g., FED/taxpayer).

I too own my home and my vehicles and have no debt. I have a health plan through the State of California and a very modest pension. I took my retirement at the ripe old age of 53 (58 now). I decided if I wanted to work I could make up the difference in my salary by being a greeter in front of WalMart. It hasn't been entirely easy with Greenspan and his 1% interest rates and then this new clown with these ridiculous interest rates. Thanks for taking care of the savers you ^&^%$rds.
Let's see what the USD, the price of gold and silver goes to when we get the election over and all the talk starts turning to deficits for the foreseeable future. It's been very, very quite in the media recently on anything about future budgets.

ALOHA !!

As I said I am on the ASX buying and I picked up this Australian producer(gold/copper/coal)tied to Asia for $0.79USD per share on Friday. Net assets backing each share is $1.72AUD. I met with management when I was in Perth, Western Australia this past Jan and was very impressed with the mines they now have and what they have in the pipe! I have been following them prior for years, but this is my first buy in for SRL and also the other ASX listed company I bought recently, Fortescue Metals-FMG.

When you can buy HUGE assets in production and infrastructure with Chinese and Asian contracts locked up for years to come at the same price of downtrodden Canadian juniors(penny socks) ... IM THERE! Use this US PESO rally for all its worth ... its meant to be traded ... I'm trading PESOS for producing assets the future EMPIRE will need. You can talk about "global recession" all you want but China/Asia will still be the manufacturing engines to the World when its all said and done and the basics of caveman days will always be in demand no matter what happens to America. Nevermind the monetary aspect. Do you think China and Japan and OPEC are sitting on their huge US Peso reserves while this rally happens? DUH-H-H??? When Sovereign Wealth Funds and the Dubai Group(including Merrill Lynch) are buying into the same ASX companies I am buying that should be a hint!

SRL
Straits Resources Ltd ("Straits")-SRL(ASX) was founded in 1992 and listed on the Australian stock exchange in July 1994.

The company is focused on acquiring and developing assets within the gold, copper and bulk commodities sectors. Based in Perth, the company has a management team with an impressive track record of advancing resource projects through to production.

Straits controls and operates the Whim Creek and Tritton Copper mines and the Hillgrove antimony/gold mine in Australia, the Mt Muro Gold Mine in Indonesia and the Sebuku and Jembayan coal mines in Indonesia owned by Straits subsidiary Straits Asia Resources which is listed on the Singapore exchange. In addition Straits has an outstanding portfolio of mining investments, development projects and exploration ground throughout Australia and Indonesia.END

re election, many of my clients are on hold with budgets until after the election

kaimu: Your post today about being debt free is spot on

:)

If you define yourself to money, then you shift your power to be based upon that paper...

To anyone I would suggest to follow this chain of thought for a second on how we chain our definitions to these constructs. It takes to many many interesting places if you follow it to different places.

For instance if you shift your money to be debt based... then your definition by definition also shifts to that of becoming debt.

That is slavery, as you can never be free to be yourself in that condition --> unless you fully are able to walk away from that debt... The way the laws are being tightened... you can't walk away... so it is legal form of slavery.

I am not soap boxing just chasing out spiritual logic about how we define ourselves and the meaning of those relations we connect out to as a result. Dont make the mistake this is only about finances... It is as much about how you define yourself as not. Since that will and can be used against you later if you are not careful.

Personally I agree 100% with Kaimu, Debt is no way to live as oneself...

unless one enjoys being the dog on a lease...

All in all a personal choice...

so it goes

- My understanding is Nov 30 is year end, and ~1/3 of the 10,000 hedge funds were expected to sell off.
Posted by: Chickenpookie
Also some one posted there will sell of stock for tax purpose.
So, every one are talking about sell off/sell/sell means like in mathematics two negative equal to positive
And that what 2nd-Avenue is saying—we rally

Taking look at news, it gives impression that senate may have over 60 democrats, which makes it easy to pass what they may wants to pass and in house democrat may increased their lead.
When market senses that presidency/senate/congress will be in democrat hand with good majority there will be big sector rotation. There will be big loser and big winner

Dear Bill,

a couple days ago I asked you what if the governments are not in control anymore. Let me try to explain why and hopefully you will engage in this discussion.

With every facility that the FED is creating it is triggering an other dislocation in a so far unaffected bit of the credit market, talking about unintended consequences. Each facility is financed by the issuance of new treasuries. The weekly supply of treasuries is well above 100 billion. So to help absorb this supply the FED has to drive the Primary Dealers into treasuries, therefore you see the bids in the stock market is drying up, besides the huge deleveraging that is happening to meet margin calls.

I think we are much closer to a worst case scenario than any "Bear" has dared to think of. What if dislocation hit the treasury market and foreigners decided not to finance any new debts as everyone is starting to save its own skin. Then it's game-over.

Bill, I would be really interested in your opinion. Thank you.

[Bill Cara note:

It's now overcast here so I came in from the beach. As to your query, I engage with my opinions all day every day. You have had the opportunity to speak your mind and I thank you for it, although I don't comprehend what "game-over" means. I think you have been listening to Roubini too much, however. I am not going to continue to argue my points. What people want from me I cannot give. I am not a psychologist. I am just a trader who has seen these things come and go a few times before. Your fears or let's say the fears of too many people like you have turned to panic. The people who are panicked and who are in debt to unconscionable levels are driving down prices to levels that are even more attractive to people like me. I am not going to tell you to stop. All I can do is thank you and tell others who will listen what it is that I'm doing. I am not going to debate you because presently there are too many of you. I think you need to debate yourselves because this is a community. I also thank you for being here and expressing the beliefs you hold. Like most everybody here, you are respectful, and everybody thanks you for it.]

Biggest Bubble of Them All' Is Globalization: Chart of the Day

By Michael Patterson

Oct. 24 (Bloomberg) -- The 90 percent tumble in the global benchmark for commodity shipping costs since May exceeded the Dow Jones Industrial Average's plunge during the Great Depression, signaling globalization is ``the biggest bubble of them all,'' Bespoke Investment Group LLC said.

The CHART OF THE DAY shows the rise and fall of the Baltic Dry Index, a measure of freight costs on international trade routes, along with three other bubbles during the past decade identified by Bespoke: The Nasdaq Composite Index of technology stocks, the Standard & Poor's Supercomposite Homebuilding Index and the CSI 300 Index, a benchmark for Chinese equities.

The Baltic Dry Index's drop from its peak just five months ago surpassed all of those, along with the Dow's 89 percent retreat from 1929 to 1932, according to Bespoke.

"foreigners decided not to finance any new debts as everyone is starting to save its own skin."

AES,

Looks like you scenario may well be underway:

"Taiwan's financial regulators reportedly have ordered that nation's insurance companies to pare their holdings of the debt and mortgage-backed securities of Fannie Mae (ticker: FNM), Freddie Mac (FRE) and Ginnie Mae securities, according to a report on the Internet site of Asian Investor magazine.

Such an order would be a stunning rebuke to Washington, coming a little more than a month after the federal government effectively nationalized the mortgage giants. Fannie and Freddie last month were placed into conservatorships with the Treasury standing ready to inject up to $100 billion through purchases of preferred shares in the government sponsored enterprises. --Barrons

Regards

Kaimu,

Paying off debt is a great choice. Suze Orman's first question is always do you have any credit card debt?

I once borrowed to buy a car (1981 VW Jetta). My first son had just gone off to college and business was slowing drastically, but we needed a car. The loan company wanted 11% interest!

I had some stock investment with gains, but thought they would gain more and they were in a taxable account. I changed to a margin account. This way I avoided the outrageous loan, kept my investments (and avoided the tax bite) and was allowed to pay it off ASAP without penalty.

Next I borrowed against my life insurance policies (v. low interest) which were at that time still tax deductible loans.

I had already paid off the house and each of two additions/remodelings, so a home equity loan was a backup source for emergencies.

An early habit of deferred gratification made money available on which I maintained a large measure of control at far lower costs.

Sleep comes easier that way.

Congratulations.

FarAwayEyes- very creative, and since we usually come up with these plans based on highly personalized risk preferences and trading styles, it should work out well for you...can't say i've (consciously) tried it with my portfolio, but i've certainly used it playing craps-> S/S/AJ would translate into pass line/6+8, 4+10, 5+9/all remaining bets-> very exciting if the market decides to reward all three...

SiO2 - AIG - To the best of my knowledge, they are still holding their "assets" but have invested their portion of the sweepstakes package in floating rate bonds.

http://tinyurl.com/3fdylg

Grym - good going! I've made some pretty good gains on mortgaged real estate until market reversal last year. The 3 most important things to look for are 1)location, 2)location, 3)location! Looks like I got out of those mortgages just in time, with plenty of advanced notice. NEVER would take the ARM bait, always felt the housing market was more reliable than the financial market.

Now everything's paid for and I'm looking forward to getting back in at the bottom again.

TARP: noun, Definition - A device used to cover large objects such as a boat, or a car. Occasionally used by Boy Scouts and everyday gentlemen to make passage over rough and muddy terrain for beautiful damsels in distress. Another possible application would be to cover excrement, but one might be advised of alternative means such as discarding such offensive objects into a sanitizing processor.

ALOHA !!

These guys running the US Banks and our US TREASURY are complete buffoons, who continually break COMMON LAW every chance they get.

COMMON LAW:
1-Do all that you agree and promise you will do.
2-Do not interfere or obstruct the trade or business affairs of others.

Our US government breaks COMMON LAW every nano-second of every day on a global scale. Who's pie aren't our fat fingers in?

First the BAILOUT is to buy crappy bank liabilities that they tell us will increase in value as the housing market recovers. Why don't they keep them then? Next the US TREASURY wants to buy bank stock and be part owners like a JV with insolvent banks, like Germany. Is anybody wondering why these insolvent US Banks are being coddled other than they have some HUGE political ties to the REPS and DEMS? Now they just essentially want to do whatever they want with the bailout money including just sitting on it and paying dividends and bonuses and going to expensive spas! Nothing like the promise of a little KY JELLY "pork" to lube the US CONgress and the public!

This is what happens when banks control our money! Eliminate the US FED and revoke the BAILOUT and let them fail! They will anyway. How many times will we bail them out before we GET THAT?

This will not work ... we're just buying time and time is running out!

ITS THE MONEY STUPID!

READ ON:
Uses for $700 billion bailout money ever shifting
Saturday October 25, 2008
By John Dunbar, Associated Press

Treasury tacks on uses for $700 billion bailout money with shifting economic winds

WASHINGTON (AP) -- First, the $700 billion rescue for the economy was about buying devalued mortgage-backed securities from tottering banks to unclog frozen credit markets.

Then it was about using $250 billion of it to buy stakes in banks. The idea was that banks would use the money to start making loans again.

But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; maybe automakers, too, even though Congress has approved $25 billion in low-interest loans for them.

Three weeks after becoming law, and with the first dollar of the $700 billion yet to go out, officials are just beginning to talk about helping a few strapped homeowners keep the foreclosure wolf from the door.

As the crisis worsens, the government's reaction keeps changing. Lawmakers in both parties are starting to gripe that the bailout is turning out to be far different from what the Bush administration sold to Congress.

In buying equity stakes in banks, the Treasury has "deviated significantly from its original course," says Alabama Sen. Richard Shelby, the top Republican on the Senate Banking, Housing and Urban Affairs Committee. "We need to examine closely the reason for this change," said Shelby, who opposed the bailout.

The centerpiece of the Emergency Economic Stabilization Act is the "troubled asset relief program," or TARP for short. Critics note that tarps are used to cover things up. The money was to be devoted to buying "toxic" mortgage-backed securities whose value has fallen in lockstep with home prices.

But once European governments said they were going into the banking business, Treasury Secretary Henry Paulson followed suit and diverted $250 billion to buy stock in healthy banks to spur lending.

Bank executives hinted they might instead use it for acquisitions. Sen. Christopher Dodd, chairman of the Senate banking committee, said this development was "beyond troubling."

Sure enough, a day after Dodd, D-Conn., made the comment, the government confirmed that PNC Financial Services Group Inc. was approved to receive $7.7 billion in return for company stock. At the same time, PNC said it was acquiring National City Corp. for $5.58 billion.

"Although there will be some consolidation, that's not the driver behind this program," Paulson recently told PBS talk show host Charlie Rose. "The driver is to have our healthy banks be well-capitalized so that they can play the role they need to play for our country right now."

Other planned uses of the bailout money have lawmakers protesting, although it is only fair to note there is nothing in the law that they just wrote to prevent those uses.

Sen. Charles Schumer, D-N.Y. questioned allowing banks that accept bailout bucks to continue paying dividends on their common stock.

"There are far better uses of taxpayer dollars than continuing dividend payments to shareholders," he said.

Schumer, whose constituents include Wall Street bankers, said he also fears that they might stuff the money "under the proverbial mattress" rather than make loans.

Neel Kashkari, head of the Treasury's financial stability program, told Dodd's committee this past week that there are few strings attached to the capital-infusion program because too many rules would discourage financial institutions from participating.

As the bank plan has become a priority, the effort to buy troubled assets has receded from the headlines. Potential conflicts of interest pose all kinds of problems in finding qualified companies to manage that program.

"Firms with the relevant financial expertise may also hold assets that become eligible for sale into the TARP or represent clients who hold troubled assets," Kashkari said.

The challenge was made plain when the Treasury hired the Bank of New York Mellon Corp. as "custodian" of the troubled assets purchase program. The bank will conduct "reverse auctions" to buy the toxic securities on behalf of the Treasury. The lower the price they set, the better chance sellers have of getting rid of the devalued securities.

On the same day it hired Mellon, the Treasury also picked the company to receive a $3 billion investment as part of the capital-infusion program. The same bank hired to help manage part of the economic rescue plan became a beneficiary of it.

With the Nov. 4 election nearing, lawmakers decided it was important to remind the government officials running the bailout program about parts of the law aimed at helping distressed homeowners by offering federal guarantees to mortgages renegotiated down to lower monthly payments.

"The key to our nation's economic recovery is the recovery of the housing market," Dodd said. "And the key to recovery of the housing market is reducing foreclosures."

Sheila Bair, who heads the Federal Deposit Insurance Corp., responded that her agency is working "closely and creatively" with Treasury officials to "realize the potential benefits of this authority."END
READ ON:

CP- re TARP:

http://tinyurl.com/6l99kc

"First, the $700 billion rescue for the economy was about buying devalued mortgage-backed securities from tottering banks to unclog frozen credit markets.

"Then it was about using $250 billion of it to buy stakes in banks. The idea was that banks would use the money to start making loans again.

"But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; maybe automakers, too, even though Congress has approved $25 billion in low-interest loans for them.

"Three weeks after becoming law, and with the first dollar of the $700 billion yet to go out, officials are just beginning to talk about helping a few strapped homeowners keep the foreclosure wolf from the door."

they need to find someone who knows how to run a bailout program- do they know what the word means?

kaimu,

Good advice about getting out of debt...I'm debt free myself.

Now it's time to watch the Flyin' Hawaiian, Shane Victorino and the Philadelphia Phillies.

Have a great weekend.

Regards

A TARP is meant to cover stuff up. One cannot argue over the obvious choice of terminology. Is there any wonder why this acronym was chosen? A Freudian slip? I think not! It is a TARP which seeks to uncover that which was covered in secrecy. A reverse TARP, if you will... Next program will be called MIRROR, with the fourth in the series called SMOKE.

RESCUE
TARP
MIRROR
SMOKE

The last one describes what just happened to private assets.

Correction:

BAILOUT - Cause the fat cats ain't going down with this boat.
TARP - That which is used to to cover (or expose)
MIRROR - Want to know who's to blame? You guessed it! Just look into the mirror.
SMOKE - Where your assets just went.

I want to take a stab at answering Bill's discussion question (rally or limit down for Monday).

I think this is a bit of trick question, as there are more possibilities than just these two. I think the sudden point drop in the Dow was caused by those who either did not want to hold their positions over the weekend and/or those who got in at the beginning of the day and were trying to get out at the best price they could.

So, this would seem to indicate a lack of confidence in the market. However, there did seem to be a little buying pressure right at the close, which means there are some bargain hunters (i.e. not everyone has given up hope).

As a result, I don't think we will have a limit down situation on Monday morning, but admittedly some bad news on Sunday could invalidate my belief. I think we will continue to see some bargain hunting if we don't get a big gap up on the open. If this bargain hunting pushes us into positive territory, we may see some of the late friday sellers jump on the bandwagon again. The same thing would happen if we get a gap up.

So, I am expecting a modest recovery on Monday morning and not a limit down scenario.

Feel free to tear this argument apart. Obviously, there was still a great deal of pessimism in the market at the close on Friday and that could certainly be enough to drive things lower if the markets overseas tank or there is some bad news on Sunday (or even if none of the above occur).

kaimu,
SRL was a market darling over here for four years prior to the great melt. FMG is well supported by retail clients but lacks institutional support mainly due to transportation issues from mine to port plus their float is quite tight. When resources take off again these two should fly, when is the question. I'm curious to understand your logic in selecting SRL at this point as the chart could be pointing to a bottom but then again it did the same back in August. Are you taking a fundamental value decision here or is it chart based?

Other resource stocks to consider with high cash to price ratios on the ASX include:
Ratios are Market Cap to Cash
Troy Resources 1.2:1
Mincor Resources 1.2:1
Independence Group 1.25:1
Apex Minerals 1.3:1
Gindalbie Metals 1.5:1
Panoramic Resources 2:1
Platinum Australia 3.4:1
Equinox Minerals 9.6:1

trying_to_learn
I think we will meander along. Between +150 and -150. Not a major movement.

What we saw was absence of buyers and moticvated sellers who do not want to hold positions over the weekend in a turbulent market.

If there is no additioanl bad news, we should be fine.

Employment information from where it occurs. Home Depot quietly institutes a hiring freeze in addition to cutting part time workers hours to 8 hours a week. For a company that churns workers like HD, a hiring freeze is a net effect layoff.

Re: the very late selloff Friday.

I don't think it means all that much. Looks to me like prices were held up as long as they could, and then inventory had to be closed out before the bell.

Not particularly bullish, but I think news and overseas trade trumps all for Mondays open,

ALOHA !!

seadog ... Another Aussie are ya?

SRL/AUD
As I mentioned in my post I am using a US Peso leverage and the AUD just took a huge spike down this past week. So there are three charts to consider. One is SRL and the other is the AUD and the other is the USDX. SRL share price hasn't been this low since 2003 mate! Seems to be basing at $1AUD for now ... It is possible that the AUD could weaken perhaps tied to trouble with the NZD, which is similar to Iceland's problems, but the AUD and economy is larger and stronger on a GDP/debt ratio basis. Fundamentally the USDX rally is running on the vapors of World Reserve Currency where it is similar to the US Presidential election of the lesser evils, which right now the USDX is perceived as the lesser fiat evil, but in truth that outlook is 180 degrees off the mark. Charts are just part of the picture ... The SRL subsidiary company SAR just came up with another $300milUSD in funds from Standard Bank UK, which has big ties to the Chinese in an environment where supposedly banks are not lending. I like the mix of metals with the added energy factor thrown in and of course the proximity to China doesn't hurt either. Also SRL is moving more towards gold production as well, so they understand the monetary aspect. Looking at the management team they are all solid with great past success in bringing production online. Lots of geologists on the Board and no fluff(promoters)!

Really to answer your question its BOTH! Charts and fundamentals. I bought based on the convergence of the AUD/USDX/ASX/SRL ... I agree both ASX companies will fly when commodities turn around and I have already explained in past posts that scenario. The real question is "when" isn't it?

FMG
Are you based in Perth? Will you attend the upcoming FMG shareholder meeting at the Sheraton in Perth? What specific transport problems are you referring to? I believe FMG is a takeover target.

G'day mate ... TA!!

kaimu (rhymes with kangaroo?)

No, I'm based in Sydney and will not attend the FMG annual meeting. The FMG transportation issues have been in the press for some time, ie BHP and RIO are both blocking FMG access to their rail networks so FMG output is less than would be the case if it had access. FMG won one legal case on this issue however there is still one to go plus the big ones can be expected to pull out all stops to prevent access.

The forex is interesting. I don't expect to see the aud/usd pick up again until commodities begin to pick up... when?? I believe there has been a large repatriation of funds out of Oz and back to the US on the basis of less risk however this is counter-intuitive as the US market/economy looks far riskier. Oh well go with the flow until it stops and flows back.

Cheers

Depression or recession?
Thanks Spot for your comment and insight about my doubts for the economy we must expect. But I just read a news that is really as bad as possible:
Volvo truck sales PLUNGE 99.7% in Western Europe!
http://xrl.us/ou5rz
http://xrl.us/ou5r3
The customers simply cancelled the orders.
Ok, I'm not old enough (39 y.o.) to remember what happened during the 70es, but honestly what's happening is dramatic. And it's really very very recent. Maybe not priced yet in the downturn of the stock exchanges. And I'm starting to worry about deflation now, both for the economy, and for my gold stocks now...

http://tinyurl.com/5waf69

Sunday Morning Coffee

CP-

i agree that TARP was an unfortunate choice for an acronym...my focus was on the word "bailout," which in my mind is associated with immediate action, instead of the emerging picture of paulson and friends sitting on the 700b and leisurely debating what to do with it...

the paragraph that pissed me off was:

"But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; maybe automakers, too, even though Congress has approved $25 billion in low-interest loans for them."

..in which case, i want the freakin' money back...

CP,

Good for you. A good example of independent thinking and sales resistance.

I'm in only a couple of recent stock buys for the long haul — XOM, DBA, GG — and have put a big chunk into T-bond ETFs (stoppable is nice) EDV,BIV,LQD to pick up some return while I wait. Will be ready to go to TBT when/if the Fed raises rates.

I expect a lot of talk, but can't see how they can possibly raise without absolutely halting our entire economy.

The other thing to watch for is if the biggest US debt holders (China & Japan) begin unloading Ts if they are strapped for cash.

I've ignored SKF and SRS lately (too bad), but haven't wanted to invest the time it takes to watch them closely. I got really nailed in early summer due to over confidence. Can't do options trading in my SEP due to it being a fee-based account.

Will buy more of the old favorites when it looks a bit more promising — JNJ, MMM, BA and more of those I've started on above.

I don't think I mentioned this before, but last week I received an offer for an immediate $76,000 loan, no credit issues — unless I were currently in bankruptcy court.

They never give up :-]

2nd,

"But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; maybe automakers, too, even though Congress has approved $25 billion in low-interest loans for them."

This really sets me off! (My wife says they can't hear me at the other end of the TV cable.)

"They are too big to fail and so we must bail." (Excuse me while I unload a few expletives off line.)

Letting them merge or buy others will obviously be to their advantage, since they will be even bigger next time around.

At least it explains why Obama is anxious to take away those guns people are "clinging to". In the 1700s and the 1930s people resorted to their guns to put an end to unrepresented taxation. Today we have huge de facto taxing, fiat currency and a newly appointed elite ruling class. Not a pretty picture.

Our "representatives" have been largely complicit in the creation of this fraud they are now covering with the TARP, so well defined here.

McCain's honesty has been in evidence with his yea vote on the "sell-out" plan. He said he didn't understand economics and has proven it. His advisor Phil "They're a bunch of Whiners" Gramm is his guiding star.

As a perma bear for the last year or so I'm starting to feel greedy.

My short-term bucket is all U.S. dollars.
My long-term bucket is chinese yuan (and of course as soon as I built my position the NDFs start showing depreciation.. my investment thesis -since I have always been too chicken$#!@# to short cause I view that as an asymetrical trade in respect to my amateur skills - my thesis is that Chinese yuan is safe haven cause China,
whose first priority is Yuan stability,is all diktat in a liberalizing narrative. From a talking my book perspective.. europe's old guard industries needing yuan appreciation.... weakness of euro against dollar ... china not wanting yen to upstage them for dominance ... coming dollar reversal... and an interesting Nov 15th meeting where currency issues will be front and center with China in attendance... assurances recently made by China to France concerning maintaining yuan appreciation policy... the fact that China
cooks it numbers better than anyone and they won't let the GDP fall too low, based on rural reporting it would seem they have been understimating GDP and might have a bit 'in the bag' .... crazy high yuan voaltility suggesting wide range of future values ...makes me comfortable long term....)

With that introduction it seems as if the V capitulation and then a rollover to the 2009 washout is the best prognosis this humble author is seeing.In trying to distill the prognosis of the safest trades.. looking at shorting long bond around the David Rosenberg target of 10 yr less than 3% in mid-2009...beginning accum when the 3.1 low breached. Thinking ETFs for 10% moves take half off exit at 20% on the upcoming V.
Not sure about the long grind down to the bear market low.. maybe ETFs... personally dont like individual stocks, in respect again to my amateur
skills, cause don't want to wake up one morning and be offsides 20%... no ideas where the grenades are.

Lelik,

I couldn't agree with you more. Not to say that BC's bullish assessment won't come to pass but suspect deflation, not inflation, will be the bigger concern for the next few months. Despite the government printing presses running overtime, the amount of fiat money pumped into the system is substantially less than the loss of wealth that we've witnessed so far.

Gold may have more to fall but hard to see how PM stocks can go down much more from here. SLW and AUY seem priced for bankruptcy.

I think gold is at greater risk than the PM miners. If gold can get back up to the high 700s this week in anticipation of the Fed's interest rate cut on the 29th, I'm going to buy some Jan 09 out of money puts on GLD to hedge my PM miners. Too painful to sell the miners now...

Gene Epstein does it, again. Unbelievable, really.

http://tinyurl.com/6zcel6

Flash!

The Fed reported this week that public safety requires the merger of the NYSE with the Treasury Dept, and henceforth all company symbols will have either the Rep and Dem suffix appended. For reasons of public stability, no Rep symbol stock can be shorted nor sold. All Dem sybols will be newly sectored into "socialist", "terrorist", or "racist" sectors and will thus for reasons of public safety have all assets frozen and turned over to the Fed for distribution to banks (Rep).

Further, all Market data will henceforth be provided by the BLS and for the convenience of the public, all Market data will be provided quarterly and revised annually. Any further failures of banks will be reported as part of the "Birth - Death Summary" statistic where it will be assumed that any death of a bank will be more than offset by a birth of a bank somewhere.

More to follow --

[satire]

Sentiment Charts -

Bullish% - SPX- wkly -- Bearish engulfing candle (but at previous gap support) - summary bearish until shown otherwise
RYNVX:RYURX wkly -- Bearish penant pattern in down trend (but at support) - summary bearish until shown otherwise
Adv:Dec NYA wkly - Bearish zig downward -- summary bearish until shown otherwise
$NYA50R wkly -- Bearish move downward -- summary: bearish until shown otherwise
$CPCE (my proprietary) wkly -- Bearish until shown otherwise
$VIX wkly On "rocket track" to Bearish extreme -- summary bearish until shown otherwise

Overall, wkly sentiment is definitely Bearish but nothing new there. I suspect that Bernanke/Paulson will have to try for an even bigger "shock and awe" event to turn all this around - but anything is possible. Personally, I try not to buy "daggers" but will instead wait for a trend change in something more than a 5 min chart.

Question on SLW. Evidently they have only about $36M in cash, they take in $9M monthly and owe over $500M. This low level of cash seems precarious to me for a company with that much debt. It is currently valued at around $700M. I'm I missing something here?

Disclosure--I bought SLW at around $6.

"no ideas where the grenades are."
Posted by: comrade swan at October 26, 2008 9:26 AM [link]

I call them land mines.

Interesting article that shows support for Bill's bull market call.

http://www.theglobeandmail.com/servlet/story/RTGAM.20081024.wdecloet1025/BNStory/SpecialEvents2/

Craig, BH

Jamie Moyer. Must have been two, three years ago, went down to spring training and saw Mariners vs. Cubs. Saw Jamie in the bullpen (always a crowd favorite) and couldn't believe he was still pitching. Recall the days when he started with the Cubs back in '84. Class act as you mentioned.

Thought he did quite a job last night for a 45 year old! BH, congrats on the win.

Well for right or wrong,,,I have been dollar cost averaging in for the last several weeks, and my portfolio shows it,,,lol. I'll see what it looks like in five years.

Been buying Dell, INTC and UWM(proshrs Russell 2000).

Still have alotta cash set aside for emergencies while sending spare cash in every two weeks to be applied.

There is no way I can tell the bottom, only prepare for it.

Dab

Grym-

well, Bill's been right about many things, and he may also be correct in both calling for and predicting major reform in our political and financial systems...the Boomers are a powerful force...i don't about you, but the people i grew up with in the sixties are certainly capable of rising to the task of cleaning house...

(off topic) the secret life of words

another great independent film, starring toronto-born sarah polley and tim robbins (and julie christie has never looked better)...set on an oil rig in the irish sea-> you spend most of the film marveling at the isolated/desolate locations/situations many promising and talented young/old people find themselves/end up in, and then it segues effortlessly into a condemnation of the atrocities of the Bosnian and Kosovo wars...

sometimes the effect a film has on you is totally unrelated to the way it's marketed (for instance, you will find "The Others" in the horror section of hollywood/blockbuster, but the scene where (Nicole Kidman's) (dead) husband returns from the front for a visit with his family before heading back out remains to this day (for me) one of the most poignant love stories of all time)...whereas this film is appropriately titled, but in ways you cannot foresee until well after you've watched it...

nice article, darkcorners. Thx.

Seamus, BH: Moyer. Amazing. We enjoyed the heck out if him here. Not many can hit the edges and corners of the strike zone like Jamie, no sizzling fast ball, all finesse, movement, placement. A great asset to the team and community, Children's Hospital, etc.

Congratulations on the win BH.
It was fun to see him pitch his first World Series game and get a win. At 45 he didn't have a lot of time.... It was well covered by Seattle news. Couldn't happen to a nicer guy.

aucourant,

Re SLW

Don't know about their debt, but SLW is a pure silver royalty play - practically no expenses other than their office operations (20 people or so, if I recall a posting from this board). It has been very heavily sold as a stock, indeed - the biggest issue would be if the mines from which they purchase silver at fixed price suspend production in case the price goes / stays low. Pascal Willain's Effective Volume indicator (http://www.effectivevolume.eu) showed large accounts selling since mid-September. It went flat these few last days. Considering its price versus that of spot silver, it's never been cheaper I believe. I would think this is likely forced account selling - hedge fund(s) owning much of it going under. Its parent, GoldCorp (GG), followed a rather similar Effective Volume pattern which make me think this is the case. Unless there's something's seriously amiss, I think it will be ok eventually.

Discosure: Long SLW (or will be if it stays here, via March short puts) - cost basis 5.6USD at these current prices.

Lots of Bull horns out there, that's got me worried. My impression at this point is sideways or down because the financial system shows no signs of easing the tug of war tension.

Consider the possible explanations for Friday's pre-market futures nose dive. How long can world economies hold their breath as damage control looses grip?

2nd - Cleaning house - Assuming there's one left to clean. Talking Heads' "Burning down the house" has been in my mind so much lately I re-bought the digitized version last night.

When the banks mark down their toxic assets as low as they dare in order to sell them, and the govt buys them for pennies on the dollar - what will the banks do with the billions of newfound money they get?

Will they lend it out to cash-strapped industry or prospective homeowners for pittance interest in order to get the economy going as a matter of social equity? Or will they use the money to reward shareholders first? (a group that includes many bank executives)?

Does the bailout legislation require them to lend out the money or is that just a pious hope? This is not a rhetorical question, because I don't know what the legislation says. Does anybody?

now you can tour the Bay Area in a zeppelin at 495/hour:

http://tinyurl.com/5qw3jo

"Despite the slumping economy, the company hopes to sell about 15,000 tickets a year in the Bay Area, aiming to attract passengers for special occasions such as birthdays, anniversaries and even marriage proposals.

"In a time when you might feel troubled, it's something you can do that's quite uplifting," Hall said."

LOL

tango6- i think the legislation was intentionally left 'vague' to maximize flexibility (EXCEPT, of course, for the pork, which is painstakingly worded so as to leave no doubt)-> what concerns me is that the urgency with which the appeal was made to tax payers has now been replaced with the kind of careful deliberation you DON'T see during bailouts...so now it feels like the money was obtained at gunpoint, and the aftermath like division of spoils...no?

2A

Like many neophyte investors, I am uneasy about the whole Rube Goldberg-like contraption and perhaps the perspective you raise is why. Thanks.

Sunday reading.

Been spending some time on Pascal Willains site, Effective Volume and other interesting subjects.

Just skimmed the following article published yesterday, very interesting, going back to re-read and do more research on the subject.

"Forced Selling Oct 24"
www.effectivevolume.eu/content/Reports/MA_1025.pdf

recommended

excellent discussion of the market drop taken from a Stanford lecture:

http://tinyurl.com/6xkpl5

"He urged students to read chapter 12 of Keynes' "The General Theory of Employment, Interest and Money," published in 1936. Gould, saying the English economist couldn't be timelier, quoted from the book: "Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than on a mathematical expectation."

Gould asked students why some economists have dismissed behavioral finance.

"Because it ruins the models," one student said.

"That's right," Gould said. "Fundamentals don't always drive the value of a stock. So many stocks dropped off the planet this last week. There are other forces at play."

"- My understanding is Nov 30 is year end, and ~1/3 of the 10,000 hedge funds were expected to sell off.
Posted by: Chickenpookie
Also some one posted there will sell of stock for tax purpose.
So, every one are talking about sell off/sell/sell means like in mathematics two negative equal to positive
And that what 2nd-Avenue is saying—we rally"

If funds expect to ditch the losers this year then I could see more sell-offs. But I do think any kind of tax harvesting/window dressing strategy at this time is very risky for any fund.

Stocks can go up or down 20% on no news in the space of two days due to the extreme volatility. If a mutual fund holds a stock I would think it's because they have a genuine belief that this is a good stock that will recover - and to ditch the stock just to do some window dressing only to see the stock recover 30% in a few days just on diminshing bearish sentiment is very risky.

Besides, most funds have already done plenty of tax harvesting already.

tango6 - Banks are still feasting on their young with sweepstakes giveaway monies. They're blocking the tracks, delaying station departure.

Cut out the middle men, blow the whistle and ring the bell!

Hedge fund, pension fund and many other institutes who has large stock portfolio knows that most stock are cheap, they are a good to buy at this price. But they are selling reason is they have their obligation to meet. Income is not coming from their investment right now and they need money and they do not have it.
So, there is big force sell going on, there is lots of big seller of stock not because they are overpriced but they need to raise cash.
So, in this situation no one knows where a stock going to be in short term.
Also in this type of situation people sell the one that is not down a lot and keep the one that is down a lot but they think it has more upside when market return to normal

re: Jamie Moyer

Thanks, guys. It's a shame that the usually lights out bullpen and a bad call by the 1st base umpire cost Jamie Moyer a World Series win.

A little known story.....during last night's pregame ceremony, Tug McGraw's son sprinkled some of his father's ashes on the mound.

Phillies Phans remain guardedly optimistic. These are both good ball clubs and the feeling is that whichever team gets the breaks, wins the Series.

Regards

http://tinyurl.com/6fxj23

Video link re Bill's mention of Howard Lutnick interview.

Case, thanks for the response on SLW. I suspected that it might have to do with being a royalty co. It looks like $9M/mo is just enough to pay back $500M over 5 years at 5% annual interest.

Well BH, they got a big break last night(Rays), and we still won.

Gooooooooooo Phillies !!!

NYUgrad,

I think the video link you provided is dated Oct. 10, on the Friday before coordinated rate cut, not last Friday 10/24.

oops. sorry for that

[Bill Cara note:

I couldn't find that one either. But here is a link to Kathleen Hay's interview with another trader's trader, Barton Biggs. I watched it on Friday too. Barton and I have been around for a while. I see things the same way he does. Most of the Bears today were not involved in markets (if they were even alive) in 1974, 1982, 1987.

Near the end, I think he meant to say that India is a bigger opportunity than China.

http://tinyurl.com/6kjr4y ]

Bull:Bear 20:80

Fundamentals reason for my bearishness are often found on the following blog:

http://www.nakedcapitalism.com/

My wishlist is for a short-term crash and a long-term bull; but I am keeping all possibilities in mind.

Positions:

45% Long-term calls
15% Short-term calls
15% Short-term puts
25% Cash

(All options are in specific equities)

As for the USD, I am long-term bearish and would very much welcome a November leg down.

Bill,

Thanks for another great WIR. In addition to your market insights, I also found interesting your list of famous Bahamians, which contains two of my favorite musicians.

Not to be confused with legendary American ragtime guitarist, Blind Arthur Blake, Alphonso "Blind Blake" Higgs was a fabled artist in his own right. His celebrated performances with the house band at the Royal Victoria Hotel in Nassau is the stuff of legends. I still play/perform his great "Jones, Oh Jones", which IMHO is one of the best songs of the 20th Century.

Joseph Spence is an equally influential player, hero to many contemporary guitarists including the incredible, Ry Cooder. All of my fingerstyle students are introduced to his unique and wonderful style of playing.

Thanks for all that you do.

Regards

I guess I should mention that I have additional cash outside of my accounts and no debt.

Bull Bear 25/75 (Since Sept - but prepared to "capitulate")

10% gold & silver coins and bars in a safety deposit box.
80% cash (10 cash deposits and other stuff coming due 1st & 15th for next 5 months, ready for trades when I feel right).
5 % available to write oex calls or buy puts.
5 % available for forex bets against US$

A thought: At window-dressing time, the bears are still semi-cuffed by SEC short selling rules, right? So the bulls have a big short-term advantage? Another thought: Will the bottom be a V, a U or an L?

I listen carefully to Bill and others who believe we are bottoming but I have to play according to my lights. I am frankly spooked by the economists, especially Roubini, who warned the current mess was coming nine months ago.

Re. the 2002 low of the SPX of ~780. We are almost there, except that nominal inflation during the period was 26% (at 4%/yr), which would be SPX=986.

We have long crossed this.

With a more realistic number of 6%, that would be SPX=1106 (41%).

"Jones oh Jones" is a cheerful ditty about committing murder with a straight razor. Great song.

;^ )

2nd,

I hope Bill is on the mark on reform. The reforms established after the Great Depression took a long time to develop by trial and error. They were systematically trashed in about the save overall length of time. I think we can expect a long and difficult process in instituting what is needed now.

So far, IMO, we are not addressing many of the issues properly and are doing a number of things likely to make it worse.

The sixties turmoil, bad as some of it was, didn't reach the extremes or breadth of what I have read of the 1930s. Today our population is far greater, racial issues this time may clash with illegal immigration and foreign job competition will become a big problem for both blue and white collar jobs.

The evaporation of our manufacturing base, fewer people able to provide for their own food needs and the need to wean our nation from a credit based economy are big issues which they didn't face back then.

In addition, we are already in a war which has been having an adverse economic effect while WW2 was pretty much a "saving factor" economically for the U.S. last time.

It will be an interesting time for whoever the new tenant in the White House turns out to be.

Dear Bill,

thank you for your reply. Just to clarify I am not in panic mode I also went long a couple of weeks ago. But all the action last week did not feel like a bottom. What I mean with game over is that foreigners just stop to fund the debts of the US. If countries had prudent risk manangers they would probably say enough we are overexposed.

Yoy can already read how China is pushing for a new Bretton Woods....

Anyone:

Do you know anything about Tim Woods? He has a site called Cycle's News & Views and seems to do a fairly descent job of telling it like it is and presents the facts as they are much like Bill.

Any comments good/bad are helpful.

Stonecrest:

Tim Woods is solid. However, you have to modify/adjust your personal timeframe, risk profile (reward/risk, lust/fear )to a newsletters analytical methods.

Plenty available there as in Bills WIR and with time you can see why they think the way they do, the methods they use and modify/adopt/discard accordingly to your own taste and consistency.

Make sure you can separate a quantifiable high probability set up from a "take the trade now" signal.

Both Tim and Bill approach it like a business, two thumbs up.

There are a couple more like them out there, just remember solid analysis does not equal consistent execution.

Best of luck..gonna miss the volatility . :)

80% bullish, just waiting for my wave.

80% Bullish. all cash.

i was putting in some stink bids into the close Friday on solar stocks, gg, and goog. When i say stink, I mean stink! none found a bid.

Staying away from rimm although the pps is shouting buy me. I just feel that consumers will not go running to buy new rimm gadgets this xmas. and with the layoffs at companies, there will be stockpiles of good conditioned used blackberries ready to be re-deployed.

My focus will be to check how Asia, and EU behave tonight.

where are laid off bankers relocating to?

http://tinyurl.com/6275dc

One of the Email I got today
Mary, what happened to people in a recession? (She is young.)
John, I said that fear and insomnia happened to most people but that a few million would actually lose their jobs and millions more would lose income.
“What do they do?” she asked, looking worried.
“They find other work or live off their savings,” I said. “They certainly cut back on their spending.”
“What if they don’t have any savings?” she asked. “I don’t have any savings,” she said. “No one I know except you has any savings.” She looked extremely worried.
This is perhaps the main lesson. . It is basic but still unlearned: human beings must have savings. This is not just a good idea. It’s the difference between life and death, terror and calm. So start saving right now, and don’t stop until you die.

i would add to vinod's post that you also consider:

(a) disability insurance
(b) long-term care insurance
(c) life insurance (if dependents)
(d) 6-12 months of living expenses in cash
(e) cultivating and maintaining good relationships with family and friends, including at least one or two out of the immediate area

outSIDE of the immediate area

Case,

Thanks for Effective Volume link.

The ETF EV section is really interesting.

http://tinyurl.com/5mt25e

I see:

Flight to treasuries by large players continues (TBT down, RSI indicates an overbought short Friday will continue flight Monday, indicating we go down again?)

If Joe Sixpack follows the large players, the flight out of GLD will continue, but HB&B is stepping into the ring so price may not fluctuate as much.

Bottom feeding going on by large players in the GDX after everyone and their mom dumped the miners.

SLV is manipulated by mainly large players... steep declines as flight to more important places (Treasuries) seem to have tapered off and some buying interest. Nice spread.

The dramatic flight out of USO (and Oil) will continue to around $45-$55/barrel, a safe level for economic growth of non-energy companies and good for steel producers (if anyone was buying cars...)

Interesting chart pattern on DUG says we're at another turning point so maybe we stick around $65 or go higher, but probably not.

UNG, lots of price manipulation there with small players still holding the bag.

Lots of shorting still going on in the QID, mom and pop figured out how to do it in Sept in their 401ks and will probably continue. Big players covering their options, causing rallies going into expiry.

QID & TWM looking similar, indicating broad-based portfolio dumping. Broke the $139 mark hitting $144 Friday, indicating we broke Oct 9 support of the Russell 2000. Ouch.

SKF - Everybody wasn't sure what to do after the bailout with financials, just followed the cash, but realized that they can spend as much as they get and a longer-term solution needs to happen. And that the cash hasn't materialized in many cases.

XLF - the smaller (and more important?) players are fleeing XLF, indicating all the advertising going on with banks is not working as well as it should.

IYR - lots of execs looking for houses, the Big Players are interested, Joe Sixpack - not so much...

SPY - the Buffett effect seems to be stabilizing this one...

FXI - flight out of emerging markets continues. Is there a black market dollar price index someplace? Small players getting interested in the China story again.

Going to skip EWZ & RSX...

DBA - again, seems to point to market manipulation and forced selling, with small players left holding the bag.

With all the bags Joe Sixpack is holding, he's going to be called Joe 40oz soon....

Just my opinion... 50/50 rule in effect at this point. :)

http://tinyurl.com/5w5rzm

Actually, most odds look like 80/20 rule, except

Category 3 storm to make first landfall in Florida

Last Price: 1.0

http://tinyurl.com/6hthyo

So it's safe for all those Wall Street execs to move to Florida and get some deals on real estate (and some "real" assets) until the category 6 storm in NY passes before hurricane season next year.

http://www.imdb.com/title/tt0428144/

Looking at Silver next week and maybe SLW...

I remember a certain billionaire, another man named Bill, talking about "losing it all" during a seminar once. He had the government come in and chainsaw his pool house 3 days before Christmas because it fell outside the 1/2 acre "homestead" boundary. (or something to that effect)

http://tinyurl.com/5s7zf4

"One year they leased twenty seven – 747's so they could fly 6,000 employees and spouses to Disney World."

http://tinyurl.com/5a7ypt

His is an interesting story to say the least...

http://tinyurl.com/6orzdl

"Kuwait moved Sunday to prop up the country's second-largest commercial bank and scrambled to protect other depositors in a sobering day of reckoning for the oil-rich Arab Gulf, which had hoped to emerge largely unscathed from the global financial crisis."
...
"The developments were a stark contrast to an all-clear message issued by Gulf finance ministers just one day before."

Note to banks and governments, don't issue any all-clear messages when dealing with financial crisis as this market sells on any news.

No news is good news, but right now no news is good news either.

A decent summary of recent interventional events...

October 24 marks the 79th anniversary of the October 1929 stock market crash. Heavy selling started on Thursday, October 24, 1929, and accelerated the following week on Black Monday and Black Tuesday, October 28 and 29. Many feared a repeat of this disaster on Friday, October 24, 2008, after Japan’s Nikkei stock average fell nearly 10% during the night, Hong Kong’s Hang Seng fell 8%, and Germany’s and Britain’s fell 5%.

“In a stunning turn of events,” reported Yahoo! Finance, “the futures for the major indices were ‘lock limit’ down before the start of trading Friday, meaning they had hit a 5% threshold that prevented them from trading any lower until the stock market opened Friday.” Traders prepared for the worst, but remarkably, disaster was averted. The U.S. market fell only 3.5%, just another “ordinary” bearish day.

Why the more modest drop in the U.S., where the financial debacle originated and should have hit hardest? Suspicious observers saw the covert hand of the Plunge Protection Team (PPT), the group set up under President Reagan to maintain market “stability” by manipulating markets behind the scenes. Bill Murphy commented in LeMetropoleCafe.com:

“Today the Muppets on CNBC were remarking how well our market acted, not falling apart as expected. All day long they spoke of how our market was acting differently today than every other stock market in the world. Well hello, the other countries don’t have a PPT, which is WHY our market is so different.

“There are those who might think what the PPT is doing is right. What they don’t realize is their making ‘Everything is fine’ for so long, and not allowing the market to trade freely . . . like allowing the stock market to fall the way it should, has kept the individual in the market . . . when they might have been SCARED out some time ago.”

http://tinyurl.com/6r4uuc

2nd_ave, I played craps once, years ago. It was late, late at night and I didn't know the rules so I bet what my friend said was the safe bet. I just stood, fuzzy and incomprehending, watching my money get swept away over and over again.

Not too different from my experience in the stock market this last year, LOL.

FAE- LOL, well then you were participating, but not playing...if you decide to learn, a crowded table is not only an exciting way to walk away from Vegas with money, it also offers an excellent vantage point from which to observe almost all human behavior associated with trading-> the gambler (of course), the mathematician, the all-in, the trend player, the contrarian, the neophyte, the drinker, the player, on and on...

table games can be a microcosm of the trading community in many other ways as well-> risk management, pattern recognition, set ups, etiquette, euphoria, despair, exit strategies, and (not least of all) learning to know yourself...

(JMO, of course)..

is there a limit up on the US markets?

(shanghai, as a reminder, has daily 10% limits up or down)..

How do you say oversupply in Chinese?

"China's top aluminum maker Chalco net dives 92 percent"
http://tinyurl.com/5l4n2m

May pick up some AA soon. Plenty of forced selling going on in that one.

When I went to China a couple of years ago, they were cloning things like mad. You could get a nice winter jacket (Columbia Titanium) for around $25-30, an "iPod"-like device for $20, and I think Windows XP was free with a box of blank DVDs. :)

"Software giant Microsoft has sparked a major controversy among millions of Chinese computer users with the nationwide launch Tuesday of its "Screen Blackout" anti-piracy program."

http://tinyurl.com/6oxj5n

Microsoft lets 1,000 blackouts bloom, Chinese users upset
http://tinyurl.com/5gprt7

Hope traders in China have the "Genuine Advantage."

It sounds like Microsoft is taking a step up in self-regulation of Chinese copyright law.

2A - "is there a limit up on the US markets?"
LOL. What a question! I'd take limit up any day!

shanghai opens down over 2%...N225 recovers from a low of 7500...all good..

"How do you say oversupply in Chinese?"

mei guan xi...;)

More news from overseas.

China scraps interest tax on stock account balance

http://tinyurl.com/5tq7xa

PPT in Australia intervenes.

""Yes, we did intervene in the market on Friday," a Reserve Bank of Australia (RBA) spokesman said on Monday. "We are there to support illiquid markets," he added, when asked if the central bank would intervene in the future."

http://tinyurl.com/6b95qk

Looks like they stepped in again today... (I mean tomorrow)

http://tinyurl.com/68p6kc

taiwan's not looking too good...

Bill:

Rick Fox was drafted by the Celtics in the first round and spent the first six(?) years of his career in Boston.

lol 2nd.

"Learn Mandarin online - China moves to control oversupply in steel"

My Mandarin translator isn't working well.

http://blog.learnchineseonline.cn/?p=159

2nd, isn't the Nikkei at a 26-year low?

that's right-> they're back to november 1982...

China's trade imbalance with the US has "only" risen 80% in the last 10 years based on last years statistics.

http://tinyurl.com/6e5mo6

Some China ETFs from this article

China Report: Does China's Prosperity Cause US Poverty?
By, Simon Maierhofer
Jul 07, 2008
In 1962 Sam Walton inadvertently started a trend that has ruined America's once proud manufacturing infrastructure.

http://tinyurl.com/6n6s59

I think there will be lots of talk about China this week.

"One easy thing China could do to help stabilize global markets: buy Agencies!"

Brad Setszer

http://tinyurl.com/699otw

Seems rather quiet overseas, if you don't count Taiwan...

Why is this chart so messed up?

http://tinyurl.com/5jc9ez

Barron's interview with Anna Schwartz: "... The problem comes from a lack of ability to price the intruments, not a lack of liquidity..."

Wow. Ain't these guys like deers in the headlight?

Taiwan -

According to MarketWatch.com, Taiwan government lifted the "3.5% limit down" rule. Taiex is down 5% just now.

"Why is this chart so messed up?"

it's not...it's the first few steps in learning to draw a crocodile...

century - LOL, What's the difference? A lie is a lie....

I remember thinking the day the twin towers fell that our government was asleep at the switch...

Today's predicament reminds me of Rumple Stiltskiin.

http://www.umich.edu/~umfandsf/other/ebooks/Grimm/044.txt

"The director of an Australian zoo said on Friday he is "horrified" after a seven-year-old boy broke into the zoo, fed an assortment of animals to a crocodile and clubbed various lizards to death with a rock."

http://tinyurl.com/4b5za9

Kind of reminds me of the last couple of trading weeks... fed to the crocs by some little kid.

Was that the front or back of the crocodile you saw?

This kind of looks like a minnow if you squint real hard.

CROC
http://tinyurl.com/5797c5

October onward kind of looks like crocodile fingers or something more ominous...

CROC (repeating history)
http://tinyurl.com/58yota

or maybe this ugly thing.

http://tinyurl.com/5adnj7

"The Crocodile needlefish (Tylosurus crocodiles fodiator) has quite a scary reputation, since this elongated fish can injure humans with its sharp snout. This can happen during fishing, or when something frightens the Crocodile needlefish and causes it to jump rapidly out of the water. "

If you squint really, really hard...
HLYS, CROC, and NKE
http://tinyurl.com/6mlbtk

kind of look like Crocodile and Hippopotamus Hunt by Rubens

http://tinyurl.com/6qbhvz

naw... don't see it.

They ought to beat that kid unconscious with the same rock he used.

Don't think so? Maybe your sister will be next.

CROC (repeating history)
should be CROX and you need to hit MAX period to see the fingers. :)

wǎn ān

Russia—Indexes will be closed until Tuesday per Federal Service for Financial Services.

Russia’s main export blend--Urals crude oil--price now “below $60 per barrel”

Despite government monetary injection, (panic) selling continues.

http://tinyurl.com/6j9bez

I was just reviewing some charts of stocks that I follow, many of them Cara 100s. What a breathtaking plunge in BC. For obvious reasons. Who would buy a boat right now, right? But since the obvious (buy gold and miners during this financial crisis) hasn't worked out for me, I'm looking for opportunities like this. Also holding MPEL. (casinos and boats, the worst ideas imaginable, right?) Placed a bid just below Fridays low. Is no one ever going to want to buy a boat again, ever? Is this company not best of breed in it's business? If I get the 1000 shares, I promised myself I will sell it at 10x, or re-think the trade in 10 years, whichever comes first...and if it goes lower, I might buy more...

ALOHA !!

seadog ... This is out of the Sept 2008 FMG Report Appendix 5B. "High Court Of Australia rejected an appeal by BHPB regarding trade practice barriers to third part access to rail infrastructures. Costs were awarded in Fortescue's favor."END

FMG is kicking up transport to max 160t gross loads and if you look at railway map of Pilbara Region it is hard to see where FMG is blocked since all the railway connecting FMGs deposits are all FMG owned 100%.

Be specific with regards to what part of FMGs railway is being blocked by BHP and RIO?

My inside sources say the Chinese government wants FMG so bad they are pressuring the Australian government to lean on BHP and RIO and rule in favor of FMG on any court issues arising from transport/dredging disputes. So BHP and RIO may team up but look who they are up against ... BHP and RIO want a monopoly on iron ore prices. The Chinese know that and they want FMG competition. BHP and RIO could buy out FMG, but I guarantee you the Chinese will outbid them!

Were you alive back in the 1970s to recall what the Japanese did in Western Australia to secure iron ore, back when they were the CHINA of the World? They always get what they want in the end.

Ever go surfing up north around Kalbarri and Shark Bay? I was living there in the 1970s and I used to find Japanese bomb fragments in the tide pools. So many I started a collection.

Australia has the resources that Asia needs and even the Japanese during WW2 saw that and were planning to invade Australia. It so scared the Australian government that they moved all their gold from the Perth Mint to a private residence in Broken Hill, NSW until WW2 was over. In Jan 2008 I was in Broken Hill touring the mine there and I went to the house they kept Australia's gold in during WW2. It was not even a BANK ... it was a house, because they knew the Japanese would be looking for gold in a bank, not a house! Did you know that about your gold reserves during WW2? Shows you how fearful the Australian government was of a Japanese invasion. If not for the US Navy in Midway there would not have been much of anything stopping the Japanese fleet in the South Pacific or the Indian Ocean.

Now America is being ruled by two Vietnam War draft dodgers! Who are the idiots that voted "draft dodgers" into office?

How did this FMG post end up with draft dodgers? HA!! Heck, I don't know? I'm high on a tofu overdose, so its not my fault!! HA!!

60 Minutes, the bet that blew up wall street.

http://tinyurl.com/5kjfoq

Kaimu
Latest News today CANBERRA (Dow Jones)--Australian Treasurer Wayne Swan Monday declared BHP Billiton Ltd. (BHP.AU) and Rio Tinto Ltd.'s (RTP) Pilbara rail lines, paving the way for third parties to access the rail networks.

"I have today decided to declare the Hamersley, Goldsworthy and Robe railway lines in the Pilbara region of Western Australia under the National Access Regime in Part IIIA of the Trade Practices Act 1974," Swan said in a statement.

The services will be declared for a period of 20 years from Nov. 19, the treasurer said.

Fortescue Metals Group Ltd. (FMG.AU) had applied to the National Competition Council to have the railway lines declared.

Rio Tinto and BHP Billiton vigorously opposed the move, saying it would put at risk billions of dollars in future investment.

Monday's declaration doesn't automatically provide a right of access. It provides a third party with recourse to binding arbitration before the Australian Competition and Consumer Commission if it is unable to agree access terms and conditions with the railway owners, Swan said.

The outcome is still subject to negotiation and ultimate arbitration if necessary. As I understand it this access is for iron ore deposits that cannot be accessed from FMG's own railway. This would have an impact some years down the line.

Some broker comments re FMG
#1 Over the long term, a possible agreement between FMG and BHP and/or Rio Tinto over third-party rail access will be crucial for FMG to develop deposits outside the reach of the future Chichester Range rail development.

#2 So where do we sit on FMG? It could be a great idea. If it works upside is huge but now is not the time to buy. We are not saying FMG will fail, but need to wait until the concept is proven and risk subsides before factoring in substantial potential upside. Upside is sufficiently large for investors to wait yet still be able to participate. If FMG works, decades of expansions may lie ahead but some key questions need to be answered first. Certainty will only come with time.

In regard to a Japanese invasion of Oz I noticed mention recently that Japanese archives indicated this was not in their plans at the time. If I could recall where I saw it I'd attach it to this post. The Japanese had their first land based military defeat in New Guinea where an Australian militia fought them along the famous Kokada Trail. Perhaps this, their repulsed invasion at Milne Bay and Midway convinced them to limit their occupations to Asia. Who knows.

I never did surf on the west coast, kind of opposite to this side where you catch an early off shore breeze with the sun coming up off the ocean rather than going down. I did surf a few beaches in Vietnam in 69/70, never did meet a "George Bush" or "Dick Cheney" while I was there. Shame, you never know where the world would be today if they had been there and seen action, ha! I'm too old to surf now, too much rust.

Another dismal day on the ASX today, the only consolation is that the percentage drops are getting smaller in real terms!

I'm curious, how do you get high on tofu?

maybe it's fermented tofu...

what are odds now for a cut?

now we know what "SiO2" really means-> if SaO2 is oxygen saturation in the blood, SiO2 is the straddle index that measures O2 flow to your port when markets seize up...