Canpotex have been increasing potassium prices. Could be good signal for SQM (NYSE:SQM).

http://www.incainvest.com

Thank You for the report Bill. Wow, fabulous stuff, just had a brief scan through it, amazing stuff. Brilliantly put together. You and your associates may have pulled an all-nighter, but it will take me the best part of a week to get my head around it all. Fabulous quality of research and I've seen them all.

Nice to see someone has read "Moneyball".

I've gone one better. I put my orders in at 3PM. If the big boys want to buy and take 'em home, I'll play along.

I'm setting my sell stop under the low of last 2 days.

FWIW. Do your own homework

Bill
GG report is world class. What an effort. Thank you. I'm still shaking my head at all the info. Where ever you get energy bottle some and put me on your mailing list.

Good morning.

Here are your Cara 100 Ratings Changes:

Price Target Lowered:

GS - from $80 to $70 @ Ladenburg Thalmann
GS - from $113 to $108 @ Deutsche Securities

Bill
Thanks for a very good daily report. Will pay attention to price movement in first 30 minutes.
GG report is excellent, I will have to read few time to get it all in my memory
Again thanks for all you had been doing for us.

About GM bailout.
Union supported congress and president will be in power by January.
Most business people are worried that union is going to have field day.
And conservative republican president is having lots of pressure from group who oppose the union, not to bailout GM. And stick to union for never supporting the republican candidate
So, issue here is quite different than just GM bailout?

SQM
Hallvardo, thanks for pointing out a company I didn't know about fertilizers.
I see that it deals with some other chemicals, but I do not understand why it has such a high P/E (21.94 according to Google Finance) while some competitors have much lower P/Es (POT=8.61 CF=5.37). Do I miss something?!?

Thanks so much for the obvious monumental effort that has gone into preparing the GG report.

On the download speed, it took only about 12 seconds here.

Lelik -

SQM is really a chemical company, with about 20% of revenues coming from agriculture. (They are partly owned by Potash.) In addition, they are one of the largest and lowest cost producers of Lithium Ion. They drag the stuff out to the desert and let it dry. It gives you an ag play, and an alternative energy play.

For the PE though, the fertilizer companies are hard to beat right now.

Disclosure: I'm underwater a little SQM.

CDS Report: GM Jitters... (a bit of noise)

http://tinyurl.com/64pax6

Watching for a strong opening as yesterday's losers are todays winners (and tomorrows losers again, in this market.)

Bill, the GG report is A+, the analysis and coverage is phenomenal - I managed to read the whole report this AM and to say I am impressed is an under statement. I hope people will discover the value of Billcara.com and CTAB by taking the opportunity to download and READ the report. I am particularly inspired by Pierre's detailed price analysis.

As for markets seems like a test of the 8000-8200 [INDU] is in order.

The lithium ion probably explains the PE.

Cara 100 Update:

Price Target Lowered:

GOOG - from $430 to $390 @ Stanford Research
GOOG - from $525 to $465 @ Collins Stewart

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

Today's Market Music:

http://tinyurl.com/6nuldm

speaking of lithium ion... if the world is shifting to alternative energy, be it wind power or solar... i expect the demand for rechargeable to be the combined of them... right?

Craig,

what is your trade today?

When I think of the market I always think of Chickenpookie first also:)

Bill,

When you say, "let profits run" how do you determine when to sell your winners. Is it based on time, % gain, technical indicator, volumn, ect. I think I know the answer. It depends on the individual situation, but when you plan the ORB is there a goal as to when to take profits on a winning position and could you give an example. Thanks again for the education.
Bob

Bull hunter,
" Ride a painted pony-- let the spinning world turn."

I'm listening to the JA Solar conference call this morning. Confirming that solar demand has been impacted negatively by the global financial crisis.

This provides a fundamental reason behind Pascal Willain's EV study showing big money has abandoned this sector.

I'm still a believer in the long-term future of this industry, but the short term doesn't look too "bright".

Today I'm a hedge fund Norm....keeping losses under control with ultras and waiting for a test of the low. That's my stance at the moment, which is subject to what Mr. Market actually does. I hope he supplies some good opportunities today.

number2son: I believe the oil price also has a negative effect on the industry/sector - alternative energies need a higher oil price - if oil is 'affordable', considering where we were, there is no need for alternatives. I abandoned my longs in this sector for now.

craig,

at least you actually hedge because it would seem the "hedge funds" don't... didn't or forgot. ooops.

your strategy has to be working good for you, it sounds great.

This is from MOnday from Scotiasbank:

* Scotia starts Canadian Natural Resources with sector outperform;
price target of C$78 * Scotia starts Canadian Oil Sands Trust with sector underperform;
price target of C$29 * Scotia starts Connacher Oil and Gas Ltd with sector perform; price
target of C$2.75 * Scotia starts EnCana Corp with sector perform; price target of $56 * Scotia starts Harvest Energy Trust with sector perform; price
target of C$12 * Scotia starts Husky Energy with sector underperform; price target of
C$36 * Scotia starts Imperial Oil Ltd with sector underperform; price
target of C$40 * Scotia starts Nexen Inc with sector outperform; price target of C$27 * Scotia starts OPTI Canada with sector perform; price target of C$6 * Scotia starts Petro Canada -with sector perform; price target of C$33 * Scotia starts Suncor Energy with sector outperform; price target of
C$44 * Scotia starts Talisman Energy with sector outperform; price target
of C$18 * Scotia starts UTS Energy with sector outperform; price target of C$3

Lelik - You have some good responses already to your question about SQM's pe. Here's a couple more thoughts.

pe refers to earnings per share. More shares means lower pe.

p refers to price. Stock prices, up or down, can be affected by what is happening in that country (see Russia stocks for an example).

gl

sergio
January 2007 ESLR was at 16.00 and oil was lower than today
no position

I wonder if in the course of time that the new Global Dow launched yesterday will become the mainstay index that is watched and reported on.

http://www.djindexes.com/globaldow/

more on this from MarketWatch:

http://tinyurl.com/5hhne7

Lelik - Sorry, got in a hurry. Should read:
"pe refers to earnings per share. More shares divided into earnings means lower e and a lower e divided into p means a higher pe."

Norm: I got into SDS/QID premkt.
I will be watching GS for a trade as it has some movement these days. Closed 74.68 last night, 71-72 this AM

Also UYG is near it's low. It has a good stop at the 52 wk low of $7. If we get all negative and then the banks catch a bid it's a decent trade.

Team Cara trading model sounds great...I've talked to my wife about setting up a trading room someday (either before or more likely after [semi-] retirement), with audio-links or video-links to other traders on the same page (craig, vinod, veteranwang, how about you, shark?)...i'm sure virtual trading floors will become easier to set up as technology improves...

[Bill Cara note:

I'll get the DR published at mid-day.

Re your comments here, I agree. CaraTrading developed a Trader's Hub that will facilitate your self-directed trading and sub-group sharing. We will have it up by the end of the month. I think you will be impressed. As an offshoot to this service, Vadym Graifer will be offering on-line trading monitoring and tutoring as a premium (but not costly) service. Our traders will issue Intra-Day Alerts on the new system. The whole package will be available at nominal cost. Cara Trading intends to help every individual who has the time and resources for self-directed trading to become successful.]

the continuous rise of the dollar makes little sense to me with the printing presses running full bore...

n2s- this could be almost word-for-word a story i read about Bay Area real estate when i first moved back in 1990:

http://tinyurl.com/5dlzrv

"Twenty percent of Bay Area homeowners owe more on their mortgages than their homes are worth, according to a study being released today. This dubious distinction has entered the American lexicon as an all-too-familiar term - being underwater."

Cara 100 Update:

Upgrade:

BBBY - upgraded at Goldman Sachs to Buy from Neutral based on valuation and eventual margin rebound as Linens N' Things completes liquidation. Price target reduced to $26 from $31

Downgrade:

PBR - downgraded at Credit Suisse to Neutral from Outperform. Cites concerns over deteriorating cost structure and earnings outlook following the decline in crude. Lowered target to $30 from $48.

Price Target Lowered:

GOOG - numbers cut at Citigroup. Shares now seen reaching $450. Estimates also lowered, to reflect new negative datapoints since earnings. Buy rating.

RIMM - from $90 to $65 @ RBC

Geez.........now Diana Shipping (DSX) has suspended future dividends.

Are any dividends safe?

vinod: acknowledged, was just pointing out another possible reason.

2nd_ave
Sound very good
I might not be working full time in year or so.
In my culture it is kid’s responsibility to take care of parent. Not a nursing home.
House is paid and enough in IRA.so may quite any time

Bill, thanks for sharing that outstanding GG report.

2nd, yes that real estate report is sobering. Lots of houses in my neighborhood that were for sale are now off the market and are being rented. Short sales are also turning up in the sales reports. Last week, for example, a house nearby sold for $200K less than its purchase price in 2006. Over a 30% reduction.

I went long DDM on the open. The breach of support on the DJI will either hold or not. If it recovers, I think we get a rally.

Not that anything in the news argues in favor of this. I've got a small position and a tight stop. I'm working more on improving my skills as a trader now than trying to make big $$.

sergio, I don't agree that oil and alternative energy are coupled long-term. vinod points out the price of oil is about the same as where it was last year. What's different today? The market hates solar stocks and we are in the early innings of an ugly global recession.

EGLE has long term contracts, but any of the shippers will trade together, so the piano player has to wait in line with the working girls to make his call....

Oil Sands / Energy Trust
Has anyone ever examined the Claymore ETF "ENY"?
In includes oil sands companies and energy trusts.
The result of the ETF is far from impressive (since investing simply in shares like SU or WAV.to gives similar results), but looking at the fund holdings (and the index) I saw many companies I have never heard of, while they could be interesting.
http://xrl.us/ow5mh

By the way, do you know other energy trusts ETF without distribution of dividend (or just once a year)?
I know it can sound strange, but for a foreigner the dividend is "bad" because of added taxes and commissions.

Bailouts for US automakers in the news, and reportedly, Bush opposes any bailout.

First rule in reading the media: "Follow the money and who will benefit".

If we do NOT bailout the US automakers, my guess is some part of any failed automaker's market share would go to Japan. TM has been hurting lately.

The money? Look who owns our Treasury Bonds. We need to sell more bonds and a "Bond dump" would hurt our Treasury wouldn't it? Japan owns the most bonds.
http://tinyurl.com/62jpr4

just a thought - buy TM?

GG report is outstanding beyond words!! Thank you and your team for offering a report the likes of which is unparalleled.

number2son
We will rally. Only positive about market is there is too much negative about market right now

Bill & caratrading team -- THANK YOU.

Personally a very slow learner esp. with the risk mgmt. part of the equation. Thanks for continually providing realtime examples of "how to"s.

Your extremely thorough Goldcorp report is much appreciated.

[Bill Cara note:

Thank you for appreciating the importance of being a student of the market, and being as calm, cool and collected as one can be under these circumstance. As they say; if it was easy, everybody would be doing it. Developing a life skill as an independent trader is definitely worthy of the effort you must put into it.]

First American made car I had,used American motor’s rambler which I brought for 150 was more reliable than any I brought since

Western Lithium (WLC-V) has a lithium deposit of note in northern Nevada, but really don't know if its ready to develop quite yet, or ability of company to do so in this credit environment. Happy Trading

For Anyone:

Can you tell me where I can find out the various index prices (DJI S&P NASDAQ) per hour on any given day?

Thanks .....

Sold my Nov $40 calls on STT that I bought at $3.90 for $4.40.

GE new 52 wk low.

vinod - i'm still hearing very positive sentiment about the market so i would say it's not nearly as bearish as we would like to see at a bottom.

i still look at the S&P earnings and think we have some downside. i think earnings will trough at around the 2002/2003 earnings level of $60ish. if you put a 10 p/e on that we're talking $600 on the S&P. I think we will eventually test the 2002 lows of 770ish.

I've heard Immelt take a lot of heat but GE was heavily into financials before he became CEO....regardless their freefall is breathtaking IMO

stockcharts.com or yahoo/google/msm finance

I just notice that now airliners(uaua) are down with oil.
this market is not working normal

vinod - just curious...where are you hearing positive market sentiment? The average Joe here in Austin, TX is talking depression or at best deep recession...

has anyone taken a look at Navios Maritime (NM)? It looks like it's a $200 Million company with roughly $100 Million in net cash, earnings of roughly $.70/share and they raised their dividend only 20 days ago to .35/quarter. Is this even possible?

blue bluff
what i said was
We will rally. Only positive about market is there is too much negative about market right now

SQM

Lelik, about the high PE on SQM. Actually the Chilean stock market is currently priced quite high, relatively speaking. The chilean benchmark index is down only about 14 percent year-to-date. Two sectors actually have positive performance for the year: Telecom (+1,6%) and Utilities (+14,5%).

bought nov $27 puts on FXI

just a recap
yesterday I was stop out of TCK (2000 share) and lost 600
If I did not have stop. I would have taken beating today

CP, (repost from yesterday's conversation —last time I bring up the issue here —apparently wrong venue)

I understand the present status of bonds.
I own bullion (more than I have ever held before).
I realize the expectation for increased rates and falling value and know this is what Bernanke is desperatelytrying to do.

BUT...
Why would anyone want to buy our debt? 
China owns a bunch and we are trying our best to devalue what they bought. Would you go back to a store which treated their customers like that?

What if no one CAN buy our bonds regardless of the rate?
The global situation appears to be similar everywhere we look — huge needs domestically, slowing sales of everything, citizens demanding attention.

Everyone has budgetary limits — from individuals up to the most consumer dependent national economy — us.

I'm not talking about this afternoon, but trying to be prepared for next year, the year following, whatever.

vinod - understood

TCK, yesterday I was looking at writing Feb $5 puts in the $1 range, today I notice they have opened up $5 options for the Nov Dec 08 months also. Currently just watching, still have partial position at higher prices.

Also PR this morning.
""TORONTO, Nov 12 (Reuters) - Teck Cominco (TCKb.TO: Quote, Profile, Research, Stock Buzz) is in talks with potential buyers of its gold assets, the sale of which could be part of a strategy to quickly pay down a $5.8 billion bridge loan taken on to finance its acquisition of Fording Canadian Coal Trust, a company official said on Wednesday.

Speaking at an investor conference, Teck Senior Vice President Ron Vance also said the company has seen "very little" pushback from customers on contract prices of its coal used in the steelmaking process.

Teck's shares have fallen sharply in the past two days amid concerns over falling demand for metallurgical coal. (Reporting by Cameron French; Editing by Peter Galloway)""

PS I see we just hit the 5 handle.

Stopped out of DDM. No rally for you!

great report on GG Bill thank you.

but i cant help but think such a report will only serve us well in the event gold and the broad market stop sliding.

right now it seems almost impossible to come up with a fair valuation other than to say GG and others are being underpriced because gold is sliding and looks to go much lower here, base metals are falling off a cliff, lower oil has done nothing to improve operating costs of the miners, and the entire market seems intent on a downdraft.

even a higher USD has done nothing to boost earnings of the miners who report in USD to help the share price.

so i see nothing working in favour of the miners over the broad market as they continue to fall percentage wise and the underlying metal does as well.

there are no shortages of nations w/ economic and currency issues that is giving flight to the USD, which will continue to impair the miners badly.

im bearish at the moment and fail to see any real light on a short or intermediate term for gold and gold miners, everything we have been told about gold and gold miners (especially the JR's) has been essentially wrong. they fell w/ the market when they were supposed to hold up, they fell again w/ the market this week when the forced selling of hedge funds was supposedly done, they fell when gold fell when gold was supposedly done its liquidation, and they fell in spite of lower crude oil prices.

what exactly will make them go up other than sympathetic moves upward with the broad market?
are all of us long gold shares essentially waiting for the blast above $950 before things get moving?

I'd pay for Hammering Hank NOT to speak.

Next stop for the DJI, 8200? That's the range of next support, at the 10/28 low. If that doesn't hold, we're heading back to October 10th.

Ick.

Hit my $10.95 stink bid on UAUA today..... gotta watch my stops.

number2son
Low on OEX was 397. when it goes below that I will load up January 440 or 460 call on it. and will take my chance

SOL stink bid @ $4 hit.

Yesterday's commentary in this blog was pretty interesting. groosbank's 4:10 PM post ignited a good discourse.

Does anyone really feel that the government's indiscriminate printing of money, randomly bailing out "important" companies in various industries is going to lead us out of this mess ? C'mon folks, let's not kid ourselves.

We (U.S.) have as a country consumed more than was justified (spent more than we earn), and now we're going to pay the price. There's too much debt both on a government and on a personal level.

This purging of bad debt will take time. Sales & earnings for many industries are going to fall FAR more than what most expect.

Some want to say that we've seen the bottom in the equity markets - that most of the bad news has already been factored in and that the bailout package will ultimately send the markets higher in the months ahead.

The problem is, it's hard to determine what is a fair valuation when you're aiming at a moving target. Solid companies who have little or no debt and that have avoided problem areas will come through this downturn better than most, but they'll still feel the pain as the business contraction takes hold.

Some have ridiculed me for advising caution after the DJIA had already fallen 6000 points, but for those like groosbank who have hard earned retirement money on the line, caution is a notion that bears consideration.

Short term, professional traders love the volatility of the markets. Long term investors need to be careful. What seems "low", can always go lower.

Just my opinion.

10 year low on OEX was in 2002 at 403
it been 10 years and we are going nowhere

GM is the only green in the DOW today....

MT and X fiddling near 52-week lows but not broken yet.

MDR just closed that 2005 gap at 8.47.

Financials (and non-financials for that matter) are all banging on the TARP office door trying to get in on the goods before its all spoken for. I get the feeling that companies are actually terrified not to be under the wings of the FED/Treasury TARP since there seems to be very little extra regulations being attached to TARP funds. (I.E. no significant pay cuts, bonuses, dividends)

I don't understand how you guys can just leave bids sitting out there...What if the airline is about to announce bankruptcy but some guy finds out and sells you UAUA at ten bucks first, prior to it's going to zero? Is that schmart?

Rode a little GM off the bottom.

Proverb for the day..Sometimes it's better to making a little than losing a lot.

meh. my position size is small in UAUA. nobody ever made any money off airlines, right?

Dianna Shipping is suspending dividend and buying back $100M in stock.

"Diana said it will suspend its dividend after making a payment in December so it can take advantage of unspecified market opportunities."

I'm guessing the market opportunity is buying back its own stock on the cheap. Seems like a sound strategy on the surface, no?

Stock down 19%. No position

who knows ?
by april market may be over 11000, and we may blast at Bill's place.

may have

in SOL at $3.99

Grym - 1)"Why would anyone want to buy our debt?
China owns a bunch and we are trying our best to devalue what they bought. Would you go back to a store which treated their customers like that?

What if no one CAN buy our bonds regardless of the rate?
The global situation appears to be similar everywhere we look — huge needs domestically, slowing sales of everything, citizens demanding attention. Everyone has budgetary limits — from individuals up to the most consumer dependent nation — us."

1) a)Buying US Treasuries is perceived a safe haven and this is why they are being bought. b) This is a question of what alternatives exist. Bond holders are exploring those alternatives, GM has a market cap of $2B, and could be a takeover target, for example.

2) a)There will always be money, the money will look for the best returns or safest haven, depending on circumstances. b)Yes, the global situation is similar everywhere except over leveraged consumers (backed by debt) have hit a brick wall, and the foundation of the spending spree has cracked. Debt contraction. Mr. Cash is king, Mr. Debt is being turned away from the theater because his "money" is no longer good. This is why Bill has warned against consumer cyclicals. There will be much less debt-based disposable income available in the foreseeable future. The mechanism which enabled debt-based disposable income has collapsed. The housing bubble was built on a leveraged foundation which has fallen apart. A new foundation is under construction, and this foundation is not likely to be so highly leveraged. Regardless, debt was not meant to support disposable income, and has been overextended.

Permission denied!

Ok Todd

give us what indicators u follow that will say the coast is clear.

I thought that I would try the new ETF X 3:

FAS 200 @ $38.75

I will wait until Friday and double down if it falls more....

TCK now approaching the $4 handle, currently at $5.05, I'm thinking alot of nervous people. I'm not sure but if it falls below $5 is it no longer marginable with most brokerages, ie my set off some margin calls and more sliding.

New lows popping up as I type.

What more can be said for the Cara trading team, the joy of imparting your knowledge and experience onto an appreciative crowd must feel great! Many thanks Bill, for allowing me to watch and learn from such a mixed bag of talents.
DanR

Vinod,

Just what Bill needs, a bunch of drunken bloggers pissing all over his lawn:)

I call these three guys, Paulson Bush and Bernanke the triumvirate of stupid-ness.

Any one of them talks on TV and the Dow plunges. All 3 of them talk on the same day and it's armageddon! (not that THAT'S happening today)

I think MDR is a buy right here sub-$9 - this is a company with 40 years of experience in designing nuclear power equipment just might come in handy.

Nice cash cushion, though they did burn through a bunch in cost overruns in the recent quarter.

I think you could buy some of this and stuff it in the sock drawer and would be happy 10 years later.

DIA volume tailing off IMO.

RE: Future energy possibilities, this was new to me and is certainly interesting:

http://www.guardian.co.uk/environment/2008/nov/09/miniature-nuclear-reactors-los-alamos

In response to bsi87:

1. President Obama has to show the proper leadership and put the right people in important places of government and oversight. This has been mentioned multiple times by Bill Cara, and others. This will be one of the most critical things that must be done right from the start of his administration because everyone is watching.

2. The U.S. government has to stop rewarding bad behavior. You don't bail out companies that have made poor decisions. In free markets, companies do fail every now and then.

3. The U.S. government needs to show it will stop the egregious misappropriation of taxpayer money. In a time when consumers are necessarily tightening their budgets, the U.S. govt. must demonstrate the same constraint and cut spending, or eliminate entirely, certain programs and initiatives that overlap with state programs, or that are not focused on economic growth.

4. A clear confirmation day (per W.J. O'Neil of IBD) with HUGE volume.

Notice that 3 of the 4 things I mentioned were related to the incoming administration, (and I'm mostly a tech. analysis guy). People have to see that Pres.-elect Obama truly gets the importance of the problems we face and takes the proper action before things will improve from a long term perspective.

Even if all these things are completed, we face an extended time of 'stop and go'. The excesses that need to be purged will take time (years).

re:EEV

Look how it's doing compared to DIA/SPX on last 2 lows.

There has been so much talk in recent weeks of hedge fund liquidations, and how much of the relentless selling is due to their forced selling. Figuring that these funds also hold large short positions that must also be closed out, does it make any sense to assume that the selling preceded a coming wave of covering?

I sold teck at $14.50 a week ago maybe(?)bought tck.to at $8.7 yesterday and doubled down just now at $6.6, What an elevator shaft! no pun intended. Any news or insight would be welcome.

Todd,

We'll agree to disagree on 1 thru 3. By the time, those are generally recognized, the markets will be well off their lows, assuming they have an effect. (What everyone knows isn't worth knowing effect).

I have to check IBD but I believe they have already called a follow thru day.

GL

bsi87

Fair enough. My point is that the turn may not be a sudden reversal like we've seen in the past. Back in Jan. 1991, the start of Gulf War I under Bush Sr. marked the beginning of a new bull market because so much pessimism had been built into the markets (the sellers had all sold out).

In today's markets, we've seen so many false starts and stops. IMO, that reflects what is happening with government interventions; they're not implementing them evenly. Thus, the players don't know who will be left dancing and who will be sent home alone.

In this type of environment, technical indicators like RSI, stochastics, MACD, etc. may work for the very short term, professional trader who cuts losses quickly.

But for the long term investor, we need to see meaningful, fundamental change before the big trend turns to the positive.

I truly enjoy the discourse and exchange of varying ideas and strategies.

im waiting for price action at the last 30 minutes to give us a signal where things are moving from here.

Stance: Cautiously optimistic but 100% cash.

I agree with Todd in that we haven't seen anything like a proper confirmation. Here's a good example from March 17th 03: http://i37.tinypic.com/25z2fso.png

While I agree that we might not blast off in quite the same way as we did then, the optimism comes from seeing a decline in volume on recent down days and support holding, for now.

Foz re mini nuke reactors,

here is the website
http://www.hyperionpowergeneration.com/index.html

Can't seem to find details of the system on the site, but it looks alot like what I read couple of years ago. China was developing a small cookie cutter type reactor, size of a house, factory built, mass produced and delivered to the site in modules on trucks. Depending on how much power was needed they would be set up in clusters.

The China technology was based on the pebble bed reactor systems, the Hyperion system sounds very similar.

Todd,

My LT signal would be the SPX weekly MACD crossing to the upside.

Looks like the CTAB GG research report landed on someone's desk at 10:50ish.

Foz - I service hedge funds and I can tell you that the majority of them are now for a most part in cash to cover upcoming redemptions by investors...

Brilliant Goldcorp report Bill.
Truly exceptional format/publishing/data/opinions.
WOW.

bsi87

Stan Weinstein used to use the weekly 10 DMA crossing the weekly 30 DMA as a long term confirmation, if my memory serves me correctly.

From a purely technical standpoint, I want to see volume come in to the upside; volume that will be so overwhelmingly large that it will be clear that the big money is comfortable coming back.

I'm OK with watching and waiting, as boring as it is.

Norm: Notice Hank's twist on the TARP this AM.....maybe he's reading BC.com too?

re: TCK
well hell I can't help myself. I'm a knifecatcher, it's in my nature, and there's nothing I can do about it. I just love the thrill of it, when you catch one at the absolute bottom and watch it turn around. Even if it's only one in every ten trades. I'm hopelessly addicted. Bought yesterday and buying more right now. Can afford the paper loss for a while if the trade doesn't work out...
Also back in X, PBR, FCX, BHP.
MCM

CP,

But you are still thinking pretty much in the traditional mode — what I'm trying to get at is totally different than what any of us has experienced.

P.S. In his book, "Independently Wealthy", (1996) Dr. Robert Goodman warns the real danger we may face is deflation because no one in a major decision making role will recognize it until too late.

Things like "safe haven" are not a consideration to a person living paycheck to paycheck. Meaningless if you have no savings to invest. The politicians talk about tax credits, tax rebates and tax brackets — all are meaningless when you have no earnings. This has already happened to a number of small businesses in my town. (including mine about five years ago)

Things are worse here now — 10.5% unemployment, charitable contributions in the tank, state funding cuts — big time. There is nothing to retrain for. People can't sell their houses and can't go shopping for a job elsewhere. Prices are low on house and stocks, but who wants to spend?

It is not as much a case of not wanting to buy — it's not being able — for many.

I'm envisioning a time when whole countries are in this same condition — needing to use whatever financial resources they have to care for their own immediate needs. A time when there will not be anyone willing to lend.

OK, in a sense you have confirmed my deflationary outcome with your "cash is king" comment and U.S. Treasuries may in such a case be the only place for any excess to go — if there is any.

Thanks.

going forward, i think we could all save a lot of time on investing by just going with longer term trends that i used over the past year in my 401k before stupidly trying to pick a bottom.

this is it:

1.) Buy the SPY when the S&P 500 goes at least 3% above it's 200 DMA.

2.) Sell the SPY when the S&P 500 goes at least 3% below it's 200 DMA.

in this current cycle, you would have sold in December and would not be buying until the S&P 500 goes back above it's 200 DMA.

this strategy works. test it out yourself. It's so easy to implement and helps you avoid massive downturns...

when it's below the 200 DMA just put the money in a money market. you'll earn money while the market drops...

p.s. I can't see unleaded gasoline getting significantly cheaper from here, for long. Anyone have any idea how to play this? Is it not a sure thing that gas prices will easily be 50% higher within a year or too? That's a pretty good ROI. Don't know a lick about "unleaded gasoline futures" but now might be a good time to learn. Anyone have any thoughts?

long ERX 46.10

Music

UGA

Yikes! Look at the at UGA chart....the agony of defeat. At least the ramp to agony....

bsi87,
Yes, thank you. Just checked it out. Low volume (25,660.6) could be a plus when it does turn around and investors try to somehow profit from rising gas prices. Might just start taking a nibble here, why not?
MCM

Craig

The rules always change. He probably is doing sine extra reading.

I don't understand why these guys still have a job.

Get the sword and do the right thing. At least the samari would.

Norm

samari?

good thing I have mental stops and my brain stopped working this morning. :)

UAUA seems to be recovering.

Falling knives. I'm almost flat on TCK trading. It does work if you believe overshoots to downside as well as up

I notice UGA an LP> What are tax implications for foreigners? I'd hate to have to file a US return after this year, being a Canadian. ONe is bad enough.

what does FXP track? Its showing very little movement even tho chinese indices have been down

Grym - 1)It seems to me a lack of foreign "propping up" would be deflationary in the US. 2)I suspect a strengthening of the dollar and an increase in saving would follow. 3)In this case it may "trickle up" from individuals (of necessity) to government spending. 4)Lower income, job losses and drop in net worth, mean fewer tax dollars for congress to play with.

1) Would the USD be worth more(deflationary), or less(inflationary), in comparison with alternative currencies? I would think less, once the "propping up" begins to subside.

2) I think it will take more dollars to buy oil, especially if bonds sell off and the FED has to pay higher rates to finance the ballooning federal deficit. What are the incentives to saving/investing? Higher rates of return than inflation. A debt-based economy cannot exist in a deflationary environment. This is what we are currently experiencing, and it is painful to watch as asset prices fall and margins are called.
Who will finance a loan on an asset which is depreciating in value? Who will purchase an asset which is depreciating in value? Is this not a vicious spiral? Sustained deflation is only possible in a fantasy world, as there would be no incentive to invest in assets.

3)I don't understand, what will "trickle" up and from where will it "trickle"? This sounds like negative gravity.

4) Lower income and jobs - Yes, fewer tax dollars in which to pay federal deficits (assuming taxes aren't increased). How does this support trickle-up and increased savings?

Now, please answer a question: How are taxes collected? Tell me if you agree/disagree that the following mechanisms exist:

1) Income tax
2) Sales tax
3) Asset tax (ie primarily property tax)
4) Currency tax (Inflation)
5) Others?

4) On this subject: When gold coins were used as currency in days of old, one form of taxation was to collect currency, dilute the purity of the metal by melting the coins and mixing with lower priced alloys, re-mint, and re-issue the resulting concoction. This was an early form of taxation through currency devaluation (inflation). The beneficiary was the entity who performed the operation of diluting the metallic content. In today's world, governments simply print money as a form of taxation.

The subject is fascinating to me, as I don't understand where the conclusions come from saying we will live for more than a brief time in a deflationary environment. It baffles me on how commerce could possibly survive.

Thanks you Bill for the excellent report on GG! I've owned GG stock since 2005, and am interested in learning more about hedging via options. Can anyone here recommend a website or book that gives some pointers on using options? Thanks!

RH

Since I have limited time here, I'm asking for opinions on CNQ ECA SU. Have they discounted sub $60 oil? I find it difficult to calibrate because I'm looking at $C prices of the stock, which seem high, because the $C has fallen. I suppose I should track in USD for that purpose and then decide whether to buy in $C. If $C rises against USD, the stock price may not because Oil priced in $USD. Any thoughts? Same problem with G.TO. It looks expensive in $C compared to where it's been but in USD probably not.

Bill, this is the first time I've contributed to your blog. I've been a long time reader, though. Thank you very much for your commentary over the years. You've contributed immensely to my knowledge and understanding of the markets - not to mention my wealth!

I'm having a problem with one theory you have consistently posited over the past few weeks and months. I'm in hopes that you - or someone else on this blog - can clarify things for me.

You've stated repeatedly that the large interventions by governments around the world will fuel inflation causing gold and other commodities to rise soon. Under normal circumstances, I would agree with this wholeheartedly. However, I question whether we are in "normal" curcumstances.

If you believe, as I do, that we are in the midst of a massive debt unwind that will probably take years to play out, how can this do anything but cause deflation over this time? Just in the US, we have total debt of about $55 trillion. Assuming 10% to 20% of this debt unwinds, I fail to see how the government soaking up a couple trillion of that is going to make a huge difference. And I certainly can't see how it would be inflationary. Now, if you assume a far smaller portion of that debt unwinds, then I can get closer to your thinking. I'm not sure though, considering the circumstances, that a smaller number is very realistic.

If you or anyone else can show me the error of my ways, I would appreciate it.

-Chin

[Bill Cara note:

Thanks for joining the Discourse. I clearly do not have all the answers but I put out into the ether my opinions and my thinking so that others can discuss. What comes back from the discussion is helpful, not just to others but also to me.

I doubt very much whether $55 trillion in debt must be unwound. There is only the debt that cannot be serviced that needs to be unwound, ie, sold or written down or written off.

To the extent that debts are written off, there is going to be deflation. In the 1930's there was massive deflation and gold (and related) was the leading asset class, just as it has been during periods of massive inflation. Monetary expansion (ie, reflation, not inflation) will work itself into the system and will result in a combination of economic expansion, credit market relief, and added reserves to banks that, using the multiplier of the fractional reserve system, will put funds into the hands of traders who will bid prices higher. There is a downside in that the value of the USD should weaken and prices of real estate and commodities, like oil and gold increase. Some assets, like real property, have been mortgaged, and when the market price falls lower than the discounted value of the payment stream, the mortgage company's asset (the loans against the property) become less valuable. But if the market price of the real property increases above that line, then the assets the lender holds are considered solid, and they will lend to others who will go out and pay the higher market price. Additionally, the reflation policy will put more funds out to employers, who will put that out to employees and other companies, which results in a greater ability of the people to meet their debt service. All that stuff is happening today. So, it's like watching water rise in the glass where today the level is below half empty to where people will soon say it's half full and later will say the level is more than half full. Voila, the debt concerns go away. I think people will be surprised how quickly the debt problem goes away, and the economy recovers and starts to grow again. But the next problem is going to be taxes. It's nice to think your house is worth say $1 million (soon) when for years you were happy that the price tag was $500,000, but when you sell at $1 million, you find you have to buy the same thing in the market for $1 million. You now have to pay higher real estate sales commissions and legal fees, and the property taxes have zoomed relative to what you used to pay. So reflation puts people on a treadmill. Reflation is nothing more than a govt that places debt on our children. Moreover, the more money they print, the further out our children and then their children will be obligated to pay the costs of what's happened today. At the end of the day, the only way out is to remove the burden of the non-wealth producer from the wealth producer. Greenspan called it productivity. Others refer to it as the need for downsizing govt, and the spending waste we see today. To wrap this up, yes, the debt problem is being addressed and with the dynamic relationship between assets and liabilities, I don't think the problem is as bad as many believe. I could be wrong. The problem as I see it today is that today's rich and powerful want govt to protect their interest in the status quo, and the rest of us want social equity based on free capital markets. If "we" win this war, those who hold the world's debt will be the losers, and those who have the cash and the gold (which is the highest quality money because it's debt free) will be the winners. Those who are invested in equity securities of "survivor" companies (ie, low or zero debt companies) will also be winners -- especially if they can trade the peaks and valleys of today's extreme markets. All of us have to choose which army to join.]

Taking the old man's (Seth Glickenhaus) recommendations to buy Navios Maritime NMM @ 6.08, NM @ 1.80, Dianna Shipping DSX @ 10.32, and Excel Maritime EXM at a penny over 9.00

Grandfather would not steer us wrong on these stormy "high seas" now, would he???

reposting the utube interview with Seth Glickenhaus at:
http://tinyurl.com/5bb7c5

Shiva:

It FXP is negatively correlated to the S&P 500

Dryshippers - Maybe there will be consolidation but the global movement of commodities is not going away (LT prospects are good). What I am not sure is the timeframe, these are debt laden companies, how many of them will survive the crunch?

Grym - Please take a look at the following chart:

http://research.stlouisfed.org/fred2/series/BASENS

I believe this illustrates the recent increase in money supply.

Shiva - How many will survive? Only enough to meet the need. The weaker will be those who are in debt, have too many of the wrong ships, cannot obtain contracts.

re: NM - I plan on reading through their quarterly reports tonight. On surface this looks like a tremendously undervalued company...

Chicken - agree, thats why i am not buying them yet...BTW, V & MA have been holding up reasonably well

C is now sub $10

sticking a bid in for NM at 1.68

chinho,
I'm no expert, in fact my investment accounts have shed a healthy 50% this year, but I am not motivated by fear or greed, 'cause it's "only money." But, 1. money printing has inflationary consequences. 2. though commodity prices have fallen due to the recession and deleveraging, there are no huge "stockpiles" of base metals, oil fields are in decline etc., and 3. billions of BRIC people will want a taste of the wine americans are hungover from... So, from my simple perspective, when this thing turns around (and it will, even if we're spending Ameros instead of dollars), resources (stuff) will be worth a lot more. That's how I'm placing my bets...
MCM

The first thing I should say is thank you. I enjoy the expertise displayed here, esp daily by mr Cara, but also by the regulars, and track many of your suggested plays as a rank amateur.

I dick around with a few bucks as I learn but nothing serious yet (ie, bought 100 GM ytd and may add today and have had small amounts of STEM, AAI, UAUA, FCP tsx, HBAN etc, but I am all out now except for GM). Two thoughts I appreciate here are "think for yourself" and "take responsibility for your actions" which I hope I do anyway. That said, I just cannot yet believe that a bull market has begun, which puts me at loggerheads with many people who are miles and fathoms smarter than I am, including mr Cara and Warren Buffet. Oh well. Until I see a panic blowoff, I will continue to think this market is going down. I can't see the importance of catching the exact bottom, anyway.

But to repeat the basic message... a sincere thank you to everyone, esp Mr Cara.

Nemo, I thought it tracked ^HSI inversely. Anyway, its performance in last 3 days is very odd, while all the other short ETFs have been moving quite a bit, this one hardly budges....

Music City Man,

Your last sentence is the key for me, "when this thing turns around." If it indeed takes years for this debt to unwind and this deflationary period to end, how can commodity markets turn around (in the long term) before then? So, I guess my real question is... Will it take years for this debt to unwind? And will it be the enormous drag on the economy (and the markets) that I envision? If the 10% to 20% numbers that I admittedly grabbed out of a hat are correct, I can't see how it won't be a huge problem.

-Chin

My feeling is when/if the markets reverse to upside, they'll roar, not letting one in at decent prices. Just a gut feeling.

Will note DJIA/SPX are making a series of higher lows.

Do your own homework.

Stance: loaded with buy stop limt orders 1/3 of 10 day ATR above LOD on CBG,XTEX,USG,VPRT,JCG,FMCN,MDR,WFMI,FAS,KWT

SOL - new low @ 3.80

chinho - Have you read my posts today? I too think the discussion is past due, so I'm throwing my ideas out there along with Grym. Grym has been harping on this subject for a while now, there's so many ways to look at it and now I'm hearing chants about prolonged deflation getting louder and louder...

Prolonged deflation isn't an economically viable model, especially in a debt-based society. Debt is a form of leveraging against real assets. Debt leveraging has been misused as a form of disposable income, enabled by using the CDS as a leverage vehicle. This has allowed an over-extension of credit, and traders were allowed to make bets against it in the form of CDS policies as well. Long story summarized - When you predict prolonged deflation, you are forecasting depression. Go to wikipedia and read about deflation...

BND showing hanging man at 50/200 DEMA.

no position.

long JCG at 12.53

Do your own DD

I closed out my AMZN puts yday at a slight profit and this thing tanks today, damn, so close

DNA ($80 breaking down from a descending triangle, and below its 200 DMA.

Tax loss sale cut off date is end of month, correct?

trailing 10 cent buy stop on SOL

It looks like hitting that 8200 support in Dow isn't that far off anymore.

New (multi-year) lows for MT and X just printed.....

Stopped out of QLD, switched to BGU (sweeten the pot)

bsi87,

i think your observation that if things road it will prevent people from coming in at a decent price is what keeps people hoping their looses reverse course as they continue to pile up.

if and when gold zooms, you may miss $50 but if the run is real and going to $1000 then does it really matter if you got it at $715 right now or $760 if you had waited for the slide?

the momentum and TA picture is negative for gold and gold shares. the fundamental picture over a long time frame may be good for both but they are moving against most of our beliefs. why fight it thinking if you dont jump in now, tomorow gold might jump $150 over night and youll be pissed.
youll be more pissed if gold falls below $680 and you continue to sit on a loss.

as each day passes and gold continues to trickle down, more people are calling bottoms and inevitable spikes. most feverish is the call for a default in the comex. nothing of any sort has come to pass and if the comex is on the verge of default, the paper price has a funny way of showing it by dropping hard along w/ the shares.

dont buy into the usual goldbug blather about the suddenly exploding price. it may happen for sure, but is that really the wya to play it when there have been far more downward plunges than upward ones this year?

Nemo

No spell check on cell phone where I make my posts.

Money supply - with put doubt it is going up but hear this, I don't think it is inflationary so becareful.
Assets are being sold at heavy sale prices or liquidations.
That could be to cover calls or shore up capital for other asset classes. Either way once the asset is sold, we will/could call that credit contraction but increase cash or money supply.

Sell an equity you just increased your money supply/cash holding.

Inflation will be two chapters or so away.

My two cents, $$$$ getting strong!

Chicken, I was wondering about QLD now, with QQQQ stuttering around 29. I'll watch for a few minutes.

dr. cosa,

I hold no precious metals other than what is in GSP.

My observations are that bottoms are painful, they're retested several times, and that the broad ones are making higher lows on lower volumes. I sense the sellers (and bulls) are exhausted. JMO.

GL.

Chinho and Pookie - there'll be no deflation, IMO

"Helicopter Ben" Bernanke's field of study is the horrors of deflation. He has committed to drop $$$$ from copters if needed. There could be high inflation and stagnation.

How can global reflation NOT cause US' foreign creditors to demand higher rates to hold dollars? = depreciation of the dollar? (This AFTER hedgies have finished repatriating funds to US - pumping the US$ - and after some months' lag in reflation's impacts.)

As the dollar depreciates, commodities (priced in US$) rise. And precious metals rise doubly, as confidence erodes in all paper (fiat) currencies.

Just one man's (tentative) expectation, always subject to confirmation or denial "at the right edge" of key charts.

Noront Res (NOT)...anyone buying????

NOT...........Down .11 cents to .60 cents cdn

Chickenpookie
Tax loss selling ends in Canada is December 31. If you are re-buying stocks you have sold to avoid the 'superficial loss' rule you need at least 30 days to repurchase so the end of November is the last date available to avoid the superficial loss. If you are selling to take a loss/gain it is December 26 for 2008

Is today the day we blow through 840 support on the S and P, or should we wait for tomorrow?

tck.b........down $ 2.07 cdn to $6.68

LARGE VOLUME 23,700,000

Paulson announced that the $700B TARP, "Troubled Asset Relief Program", will actually not buy troubled assets now. So why is he still calling it TARP? Unless the A is the Assets without the 't'.

Now that the rules changed again and non banks qualify for the billions, wonder if AXP will still convert to a bank.

TZA, one of the 3X bear ETFs (R1K), up 18%, ERY up 20% (energy), FAZ (financials), +18%.

Deutsche Bank is back to where I bought two weeks ago - still waiting on it (interesting P/E of 1.65?). MOS is coming lower, towards 20s again. SU looks interesting at 19 for a swing trade. Can't figure out what's going on at TCK, and Hecla Mines looks like its about to ride off into the sunset.

I just can't punch the BUY button today.

"My feeling is when/if the markets reverse to upside, they'll roar, not letting one in at decent prices. Just a gut feeling."

bsi, I don't know if you're right, but this is why I will not touch the ultra shorts right now. Even though this is where all the dough is getting made now, the risk/reward is extreme.

im thinking the following plays out this week and next:

USD keeps moving up.

gold overshoots $690 on the downside
along w/ the broad market. possibly $660

broad market retests and then falls below oct/08 lows on lower but still above average volume.

asian markets fall much lower on strong volume.

Fed and G-20 announce global rate cuts quickly to stem the tide. ban on financial shorts re-enacted

market hesitates at first moving a bit lower making people think rate cuts didnt work before the market explodes higher taking gold with it and the USD starts to fall.

sv
Just got the fill on Noront at .58, lets see how she goes.

Not seeing the 1/2 bump.

Do not forget lower oil and gas (NG) price is a big stimulation for economy.
It saves a lot for consumer/company and government
Lower commodity price will add a lot to company bottom line
There is a lot of positive going on because of lower energy and commodity price

TCK
The hyenas are out in force. If you believe TCK has a debt load/business model that will not sustain itself beyond a quarter or two you should sell. Share structure will buy a lot of time if needed, which I doubt. FD I am long and adding to my positions, this is my Warren Buffet stock.

In the next couple days, I'm looking for a USD index double top @ 88, and markets hitting, & hopefully bouncing off lows at that point. Until then, sitting in cash & enjoying the sidelines.

yvrapx

I just bought more tck...LONG

yvrapx - Thanks, I believe US also currently plays by those same rules(for the time being, unless they need the market to fall even more).

i obviously suck at this. boy do i know how to pick'em.

hope everyone else is doing better.

After seing a little rally in the market just now, I figured that the time might be right to buy 500 shares of ESLR (which I did buy at $3.15), to replace the shares I sold a couple of weeks ago at $5.50. Placing a sell limit order on these shares at $4.50.

Bill,

Of all the billions of words spent on describing the current financial crisis, the word fraud is seldom heard. You are one of the few writers who has consistently called out the truth.

Criminal fraud has been committed by HB&B as they knowingly sold fraudulent bonds worldwide. The fraud continues with their bought and paid for politicians shoveling out taxpayer money to cover losses generated by the initial fraud. You correctly mentioned in your comment today that we now wait to see if the new President has been bought and paid for by the criminals who have perpetrated the greatest financial fraud the world has ever seen. The choice for a new Treasury Secretary will be a tell as to whether the fraud will continue or justice and truth will win. I would like to be optimistic however I am not.

Here is a great article by Paul Craig Roberts, a former assistant Treas. secretary under Reagan, which discusses our current state of affairs. He also tells it like it is.

http://www.chroniclesmagazine.org/?p=780

DH - What goes down must come out! I switched from 2x -> 3x, maybe they'll introduce some 4x's?

And no, I'm not down and out!

dr.cosa:

Whether your prediction is right or not, you got the right attitude...better to jump in when the water is clear.

i know a lot of people here are saying that the negative sentiment is so great that it's positive, but i can't tell you how many people i've hear say that 10/10 was the low for the market. that implies that they are bullish.

i'm not saying we're going to continue going down, but i continue to think that sentiment is still too bullish. ultimately, i think we need to retest the 2002 lows.

tgifbipo

I tried to get filled at .58....no luck

good luck on your purchase at .58...last.60cents I believe

TARP? why don't they rename it after the Batting Average of this Relief Fund and call it BARF? as long as they're renaming, they could also add an N to the Dow and call it the DOWN...no question, the last 5 days have extinguished many pockets of hope...

re:inverse ETF's.

time to buy them was when they retested their 50/200 DEMA, not now. I expect newbies will pile into them as they are frustrated and confused about the economy/markets, near the top.

long DB 30.95, MOS 30.30, SU 18.95

bought some FAS at 35.81. Used a contingent order. When SFK traded above 174 which was halfway up the reversal on 10/28, the market order for FAS executed.

Hope the new year brings an upward trend and some smiles...tired of these major swings.....tsx down 501 POINTS

sv

Thanks, cant believe it got down past the lowest of the year level, as always will set stops but i really believe that this is a superb property that they are exploring and i am hoping to hold this long term, the team that has this company is excellent with a great track record. Check out this property at their web site.

2nd, this is the sentiment you want. Everyone dejected and disappointed is paramount to a bottom.

BTW, I was digging around in this horseshit today and I think I found Kudlow's pony.

They could call it the AARRP, Assets At Risk Relief Program.

Bill thanks for the Goldcorp report EXCELLENT !!

GREAT TEAM BILL...

And thanks for all the education you provide..

Bill do you ever sleep ?????

craig- true...hate to say it, but our best shot at a rally right now is a kick to the groin that pulls in the last of the sellers...

NYUgrad - "Boy do I know how"
If you discover how to accomplish the inverse, please don't keep it a secret.

All we need now is the magazine cover titled "The Death of Equities" and we know we've bottomed

Markets anticipating GM-UAW showdown while Paulson jawbones about TARP.

Does anyone know how to parse the implications of the change of TARP strategy. Is this good, bad, or indifferent?

sharkster - How's mom doing? I've been thinking of her...

Best Buy and Paulson just destroyed tech. Any good Tech Short ideas? I'm thinking even Cisco has a rough road ahead of it. Over the next few months some big BK's are coming and slightly used routers will be everywhere.

Guessing some Asian nations are fearing the next two trading days.

Feels like panic is coming and I have no current Gold or Silver holdings. More forced selling and strong dollar creating a headwind? Then we have Bretton Woods II coming and I have no idea what that bodes for the metals.

GLTA, a lurker just wanting to thank everyone for some great posting on this thread

here's an interesting observation by Hulbert about three timers who called it right, but lost big due to the inability to time the drop:

http://tinyurl.com/5kxtch

"Just ask Harry Schultz. Or Howard Ruff. Or Jim Dines.
All three advisers, each of whom has been editing an investment newsletter at least since the 1970s, have built their investment careers by questioning conventional wisdom's trust in the soundness of the financial system. Not surprisingly, all three have been vociferous champions of gold and other precious metals.
You'd think that they would have cleaned up over the last year, since the disintegration of the financial system in recent months is almost exactly what they have been warning us about for decades.
But you'd be wrong.
Of the 181 newsletters on the Hulbert Financial Digest's monitored list, these three advisers' newsletters are in 173rd, 175th, and 176th places for year-to-date performances through October 31, with losses ranging from minus 64.9% to minus 70.0%."

groosbank:
You mean the fact that they rushed to spend 350 billion (with no oversight or accountability) and are now basically admitting they don't know what the hell they are doing? And don't want to tell us what they have bought with the first 350 B?

Not bullish in my book.

Sounds like they are now giving up and throwing mortgage based assets out the window in an attempt to save the next thing to blow up.

Can someone give Paulson some Trading 101 lessons? I guess the market remained irrational longer then he could stay solvent. Who woulda thought that coulda happened, especially when you have a bazooka and a blank check in your pants.

I laugh at all the basic trading rules these huge Wall Street hotshots are pleading to be able to break (Just give me some capital/time and the prices will come back to me. Let me have some more leverage. Give me some margin so I can average down my losing trades.) It goes on and on.

None of these guys are traders. Quote I saw from an S&P trader after the ibanking 40-1 leverage news come out "Not a single guy down here in the pits woulda put that trade on with that leverage."

Well, not the ones that want to live very long, anyway.

...should say three ADVISERS who called it right, but were unable to time it..

RE: TARP Change

I could be way off, but todays TARP change seems to be a long term positive if I understand correctly.

TARP-bucks will not be used to buy illiquid mortgage backed securities. This is good (I think) b/c it means that the FED/Treasury will not have to enter the illiquid market for MBS. This was a big concern b/c one giant player in a tight and illiquid market screams of potential for market abuses and lack of transparent competition for bids.

Perhaps by announcing their prior intent to purchase MBS, the FED/Treasury had actually artifically stabilized the MBS market (as holders were more patient waiting for TARP funds to buy MBS than selling them in panic).

So, as for the short-term, MAYBE this action has caused an adjustment/repricing in the MBS market over the last few days (surely some people were aware of this TARP rule change ahead of time). MAYBE this resulted in the equity market slide as MBS holders raise more cash (sell equities and other assets) to offset decreased value of MBS?

Long-term, I like that TARP is not buying MBS. The idea that the FED/Treasury could in any fair way price/purchase these assets is too suspect IMO. At least by buying into the banks, the FED has an interest of whatever non-toxic assets they have left as well as mortgage related assets, right?

To sum up my rambling, by choosing to buy stakes in banks rather than directly purchasing assets, I THINK they have chosen the better of two very stinky piles of garbage in which to place the TARP-bucks.

When you're The Hammer, everything looks like a nail.

http://tinyurl.com/5brnb6

"Trick/Gadget plays
Trick/Gadget plays are plays that are designed to appear to be one type of play while in reality is another. These plays typically will catch defenses off guard. Common examples of trick plays are the Half Back Pass (Where the running back will pretend to run the ball, but instead throws it to a receiver down field), the Flea-Flicker (The quarterback hands the ball off to the running back who in turns pitches it back to the quarterback who then throws it to a receiver down field), and the Hook and Ladder, also known as the Hook and Lateral (One receiver runs a hook route and upon catching the ball, laterals it to another teammate as he passes him running down the field). A notable example of a trick play is the Antwaan Randle El touchdown pass to Hines Ward (Steelers) in Super Bowl XL."

Fooled you. Why would we buy troubled assets when we can just own the institutions themselves?

Next play?

http://tinyurl.com/5tpfoh

Waiting for Hail Mary...

Down periscope.

To those who follow Dry Shippers, what do you think of Genco (GNK)?

Si02,

The frequency of rule changes is one of the things keeping me from doing much right now.

Intel guided down further.....dragging the big caps of the naz with it.

Anyone for MSFT with a 19 handle? I couldn't find a lower low on my 10 year chart.

deflation anyone?

Remember all those posts and attempts to nail the top of oil? Because it would reverse so fast that you hadda be 'in it to win it' for the turn, etc., etc.

Bunk.

I'm convinced more than ever that top and bottom calling is just ego-feeding hubris. There were plenty of chances to go short oil after the turn, and even a decent sized pullback as an entry, if you had the stones to go short in the hysteria (the pullback at 115 night before the first hurricane anyone?)

There will be plenty of chances to go long equities once the market turns. Say, when the 20 crosses the 50, for example. Say, a three bar reversal with correlated positive MACD. Whatever. Choose your indicator, it doesn't matter.

Or you can just keep getting chewed up.

hopefully the futures roll back over by tomorrow. I can't believe the wool pulled over everyone's eyes about how slow things could get. The pundits on tv are amazing...

At these levels, one would think that the news is priced in apparently not....

but i still believe that deflation is not priced into the prices.

ie housing prices, energy, service costs, just wait, prices will continue to drop and helicopter ben's power is futile to these forces. we are already at zero interest rate policy, just that the fed funds rate isn't' their yet....

chicken,

it boggles my mind. i couldnt have picked the biggest nyse loser if i had to for my life if you asked me to. and today it comes to fruition. "Bingo we have a winner" dont i get a prize for that? maybe a free copy of Bill's next trilogy?

a stop loss would not have helped as it sank like a waterfall.

at this point maybe i sell puts. SOL has revenues and earnings growth. market cap now = approx 1 qtr of revenue, which seems rediculous.

Or i sit tight on my holdings. I have my health, family, a good paying job *for now, and my looks :)

I am def perplexed by the selloff today for sol. another humbling experience. but unless this company is heading into bankruptcy i think i will be ok. just pissed that my money is locked up.

norm - i posted here a few weeks ago about housing prices. the median national home price right now is still 4 times the median household income. the historical average is roughly 3 times. that's a full 25% lower than current prices. and during the great repression (a depression/recession hybrid???) household income will fall, making the current median home prices even more than 25% overvalued.

the first 20% drop was devastating to the economy. i can only imagine what the next 20% will be. i'm holding out hope that the stock market will price this in way ahead of time but i think it will be a long drawn out stock market malaise. i'm also hoping that the 2002 lows hold, although i doubt it...

"Intel guided down further.."
there should be SEC rules that when market is down five day in a row or something like that
no more down quidence --only up quidence will be allowed to release

agree... Thursday and Friday should be happy news days.

Monday and Tuesday can be government speech days.

Full moon tomorrow...

http://tinyurl.com/yokjns

Intersting the GM GMAC bailout ball being billied about now. I was told by a Calvert Funds VP about 4 years ago (before all this came to pass) that they don't invest in predatory lenders. He named GM as the largest holder of this title. In public.

Vinod
Its on days like this that your humour is truly appreciated :)

V-I'm perfectly serious! ;-)

When 'everyone' is sitting on the sidelines waiting for the bottom before re-investing why wouldn't the market keep falling. If many are bullish then we haven't yet hit the bottom. For those of us who are position traders why would we bother with picking the bottom? Let it happen, then use your system to start buying. The question that remains is will we see trends or sideways ranging. Whilst some here have said they see a V-shape recovery, which we would all love to see, I'm doubtful. If its a ranging recovery I'm going to have to swap from trend following systems to something like Elder's impulse system.

Someone posted a request earlier on about sources of information about options. My advice is read Bill's book then find an options broker that is straight, honest and good. Much harder to do than say I'm afraid. I've been lucky and found such a beast who comes up with trades in the fashion suggested by Bill. Options trading requires a psychology/personality remarkably different to stock trading which is why I trade stocks and leave options to the specialist. I found I couldn't manage the volatility even though my sold legs had cover and time decay was working at its best.

I could just puke

Wavesmash,
Here's your econmist turned astrologer view:
http://www.polarisbusinessguides.com

Full moon is 10:18pm pacific time today
All activities are considered 'challenging' today.

Vinod, agree re guidance on down days, they should bring back the uptick rule and apply it to guidance, PR's, Government talking heads etc.

CP,

"A debt-based economy cannot exist in a deflationary environment." Agree.

What if we are in the transition back to a "more real" or healthier economy which is asset based?

"I would think less, once the "propping up" begins to subside." Agree.

If things get bad enough, globally, people will only by what they can afford to. (What a concept.) Not by choice, but out of necessity. People meaning individuals up up the food chain — cities, states, countries.

Couldn't we see a sort of reverse "stock split" in currencies? Or, in other words global deflation. This is what I meant by "trickle up." I don't buy products or services and keep my money to buy food, clothing, shelter. I would no doubt need to pay taxes (one of those sure things, as in death &), but I would not borrow. (I never do so no sweat there.)

Because foreign currency is worth more (at last initially) we go back to buying domestically. This in turn makes manufacturing viable once again.

I don't see this as being a total situation — there will still be people who have enough to sustain some foreign trade, but the US consumer is already being forced to reduce spending and has cut the imports.

1) Income tax — amount collected will be lower due to lower paying jobs
2) Sales tax — same as above
3) Asset tax (ie primarily property tax) In Illinois we haven't had this for years except as real estate taxes.
4) Currency tax (Inflation) Can you still have inflation along with deflation over any extended time?
5) Others? The government can only take what we have and no more. We have less they get less and must learn to spend less.

I don't know just how much what my friends, relatives and I have been experiencing is being felt as yet in other parts of the country. But some of the 59 names on the list of people I know are in states other than Illinois. Michigan, California, Connecticut, N. Carolina are the others.

Re: options
I've read a few good options books but I agree with seadog about the personality differences required to trade options. After all the reading, I still have problems getting my head around options.

To books:
- Bill's book - the section on options is only about 20 pages, but it put in a straight forward manner where you would use different strategies. I felt these 20 pages was worth the price of the book and the rest of it was thrown in for free!
- Complete Guide to Option Selling - James Cordier & Michael Gross - I felt it showed an area that most people don't think enough about (except Bill), using a supposed low return, high risk strategy for consistent returns.
- Options as a Strategic Investment - Lawrence G. McMillan - a 1000 page encyclopedia.

Now if only I could feel that all the reading has helped me. . .

Intel and Dell have smashed thru their 52 week lows in after hours trading. Will tomorrow be our date with destiny?

Brown-Cal
please make correction. they smashed thru 10 year low

Recommend The Bible of Options Strategies by Cohen.

and Bill's book of course.

Any resource for finding the most liquid options & historical options charts? (CDN securities preferred)

ALOHA !!

BILL ... excellent CTAB analysis on Goldcorp. First rate, in every sense. Your "001" report is off to a great start! Thanks ...

Jeff Macke on Fast Money says his trade for tomorrow is to sell his ultra shorts.

I decided it might be good to take partial profits on QID AH @ $85.25. Will be looking to sell the rest tomorrow or at the test of the low whenever that happens.

Posted by: NYUgrad [TypeKey Profile Page] at November 12, 2008 6:01 PM
I am def perplexed by the selloff today for sol. another humbling experience. but unless this company is heading into bankruptcy i think i will be ok. just pissed that my money is locked up.

NYUgrad - Just a suggestion but you might want to put a chart of the SPX over one of SOL, weekly might do best, and look at the correlation of moves. With hedge fund computers at work, it isn't surprising that when the big ship floats out, it drags its dingies along the same path.

I would try to time my buys to correspond with buy signals I get for the SPX itself for such stocks as SOL (no position).

works until it doesn't.

Groosbank,
I'm past puking. Even though I had reduced my level of investment in equities over the past year I still have a substantial amount remaining. I used to wake up in the middle of the night in a sea of perspiration until one night I said if I didn't stop this I'd wind up with a stroke or dead, so I stopped. I think its a waiting game now. If you are in good stocks they will come back, we just need to be patient and preserve our overall well-being. Perhaps in two years we will be laughing about this...ha!

I just finished reading "The End", that article on portfolio.com that has been making the rounds. I'm sick to my stomach.

These *criminals* who got paid incredible sums to sell garbage around the world, the folks at the ratings agencies and those who created, promoted, and benefited from this web of lies...please tell me they will be brought to justice, and their gains considered ill-gotten.

If the Treasury is looking for more money, that's where they should get it. Yet I fear that the worst organizations/people from this mess are going to get bailed out by us taxpayers. I heard tonight that the hedge fund managers who will face Congress tomorrow will likely have their hands out to the TARP. If this happens, I'm not sure how much America will be left to recognize.

If there's a happy song to sing in all of this, someone please sing it, provided it's not a fairy tale. I'm perhaps too inexperienced to see any light here.

teamfuego

Your housing post is on da money.
Don't think the market will price it in anytime soon.

We might be in a time that no one has seen before.... Long time ago.

IMO the forces of unwinding are very powerful.

To help fix this we should and need to do something massive that won't cost much in terms of real money.

Fleckenstein says it best. Fix the problem- tort reform, term limits and flat tax. I'll throw in eliminate the fed and have markets determine rates too.

Great research report on GG. Best I have read.

Bloomberg: "Paulson has committed all but $60 billion of the initial $350 billion allocated by Congress to take equity stakes in banks and in insurer American International Group Inc. Lawmakers, who could reject Treasury requests for the remaining $350 billion, are pushing for aid to automakers including General Motors Corp. Paulson is resisting."

"The TARP really gave no incentive for the banks to lend the money, carrot or stick, and that's a big problem,'' [Senator Charles Schumer] said on a conference call with reporters. "

So, $290B just went up in smoke and did nothing useful. Unbelievable! Surprising? No! How many of us here were complaining about this before the bailout was approved!

Why not threaten to take back the TARP 'investment' from the Banks and re-allocate to those that are willing to lend. How did the banks get the upper hand so quickly?

Seadog,
Half my portfolio is BRKA, which I thought was a hedge or cash equivalent, but it has come down with the rest of the market. The balance is in BP,Pfizer,Merck,DuPont,GE,Pepsico,BASF, and SPY. I don't see how I have lost so much money with these stocks, but I have. I hope they will come back. I admit I have trouble sleeping. How did you overcome the anxiety? That is my problem now, the worry and anxiety. Surely, this too shall pass.

Foz,
Could you provide a link to that article, please? I searched and couldn't find it on portfolio.com. Thanks.

Surely, this too shall pass, but I am not sure.

Here ya go Mackinaw. Ready your barf bag.

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom#page1

Think about this for a second...

$1 Trillion

divided by

$50,000/year x 2 years

=10,000,000

The trillion is what the government will be paying to these banks to shore up their balance sheets so they can be drowned in another 6 months. If this trillion was put into jobs paying $50,000 per year for 2 years to build bridges/roads and pay for solar and wind energy initiatives, it could employ 10,000,000 people. That is all of the people that are currently unemployed. EVERY SINGLE ONE OF THEM!~

Wow.

Dear Chickenpookie,

You are kind to ask about my mother. It's been 4 weeks this upcoming Saturday that she had her stroke, and has been in IC and then rehab all this time. They are sending her home this Friday, we have arranged for a private nurse to test the blood/give insulin, and we are really excited that she's coming home. To cut to the chase, her long term memory is very good, her language is excellent, her motor skills, kind of in decline before this happened, are "ok", she's not gonna be entering any marathons. Best of all, she is still "herself", still a sweet, loving intelligent mom and I do thank the Gods for providing us with as good an outcome, thus far, as we have.

Thanks for asking, you are a true blog friend and a friend in general.

groosbank,

I'm in a similar situation having a retirement portfolio of quality investments that has lost big time. I've been following WAY too closely for my own good and getting myself worked-up(I can pat myself on the back for not adding to my woes in the past month by doing something really stupid).

I've come to the realization that worrying is not going to do me one bit of good. I'm well diversified across geographies and industries and that is the best I can do (I don't believe I have the personality to become a trader). I'm 50/50 cash/equity (though I started at 33/66).

I'm trying to dial back on the information overload. I've stopped checking my porfolio daily. And I've accepted the fact that it is going to be years before my portfolio resembles its former self.

That said, I will add to my investments to try and average down at some point. I've accepted that it won't be at 'the bottom'. Perhaps when the time comes I'll feel that its not necessary and that will be ok too.

Lifes short and there are plenty of (free) things to enjoy (lucky for me I live modestly so no big changes there) - that's where I'm going to try and focus my energy for now.

Interesting juncture in the markets we have reached. I thought it would take until Friday at least but here we are very near the Oct. 27 lows now (e.g. SPY). Or are we? Looks like Financials (XLF) are already well on their way down to new lows and looking at some biggies like GOOG, the bottom has already fallen out. I'm mulling over strategies at this point as I'm now back to 75% cash (25% in some boring bond etfs) after picking up a bit of green on that last boom-bust cycle.

I'd be interested on hearing what some of the less-sophisticated options players are employing right here. bsi87's stop limit buy orders on a bounce-hope is one credible plan. I guess waiting for a breakdown and failed breakout at the new resistance level is another. I'm also mulling-over a load-up long with some inverse ETF hedging to mimic options - i.e. dump the inverse ETFs fast if the bounce is hard up on volume or if the lows dont produce a bounce here and breakdown, just cash in the inverse ETFs when the fall runs out of steam and use the gains from them to bulk up the longs, reducing my cost basis.

Of course, 2 more options are to make an opinion bet either way: bounce or breakdown. I don't like those 2 anymore.

Finally , I guess one could sit on the sidelines and watch but if its a bounce that'll probably leave about 50% of the rally on the table.

Grrr this is difficult.

Thanks, Foz. Read that yesterday right after watching the Glickehaus video - hence my cranky post about brokers. Barf, indeed.

Mackinaw, IWM strangles have been working well for quite some time (there is a report on my handle if you like).

Looks like the DOW 30 is being thrown out the window: Bill I think your audience branches farther than you think!! Looks a lot like the CARA 100 in concept and components...

NEW YORK (MarketWatch) -- The Global Dow launched on Tuesday -- the first addition to the Dow Jones Averages family of indexes in 75 years.

http://tinyurl.com/globaldow

The Global Dow is a 150-stock index of the most innovative, vibrant and influential corporations from around the world. Only leading blue-chip stocks are included in the index. Its components, like those of The Dow, are selected by editors of Dow Jones. For more information please contact us at djindexsupport@dowjones.com

http://www.djindexes.com/globaldow/

3M Co.
ABB Ltd.
Abbott Laboratories
Alcoa Inc.
Allianz SE
Amazon.com Inc.
America Movil S.A.B. de C.V. Series L
American Express Co.
Anglo American PLC
Apple Inc.
ArcelorMittal
Assicurazioni Generali S.p.A.
Astrazeneca PLC
AT&T Inc.
AXA S.A.
BAE Systems PLC
Banco Bilbao Vizcaya Argentaria S.A.
Banco Santander S.A.
Bank of America Corp.
Bank of New York Mellon Corp.
BASF S.E.
Baxter International Inc.
Bharti Airtel Ltd.
BHP Billiton Ltd.
BNP Paribas S.A.
Boeing Co.
BP PLC
Carnival Corp.
Carrefour S.A.
Caterpillar Inc.
Cemex S.A.B. de C.V. Series CPO
Chevron Corp.
China Construction Bank Corp.
China Mobile Ltd.
China Petroleum & Chemical Corp.
China Unicom Ltd.
Cisco Systems Inc.
Citigroup Inc.
Coca-Cola Co.
Colgate-Palmolive Co.
Compagnie de Saint-Gobain S.A.
Companhia Energetica de Minas Gerais-CEMIG Pr
Companhia Vale do Rio Doce Pref A
ConocoPhillips
Credit Suisse Group
Daimler AG
Deere & Co.
Deutsche Bank AG
Deutsche Post AG
E.I. DuPont de Nemours & Co.
E.ON AG
eBay Inc.
EDP-Energias de Portugal S.A.
Exxon Mobil Corp.
FedEx Corp.
First Solar Inc.
Freeport-McMoRan Copper & Gold Inc.
Gamesa Corporacion Tecnologica S.A.
GAZPROM OAO
GDF Suez S.A.
General Electric Co.
General Motors Corp.
Gilead Sciences Inc.
GlaxoSmithKline PLC
Goldman Sachs Group Inc.
Google Inc. Cl A
Hewlett-Packard Co.
Home Depot Inc.
Honda Motor Co. Ltd.
Honeywell International Inc.
HSBC Holdings PLC (UK Reg)
Hutchison Whampoa Ltd.
Industrial & Commercial Bank of China Ltd.
Infosys Technologies Ltd.
ING Groep N.V.
Intel Corp.
International Business Machines Corp.
Johnson & Johnson
JPMorgan Chase & Co.
Komatsu Ltd.
Kraft Foods Inc. Cl A
L.M. Ericsson Telephone Co. Series B
LG Electronics Inc.
LVMH Moet Hennessy Louis Vuitton
McDonald's Corp.
Medtronic Inc.
Merck & Co. Inc.
Microsoft Corp.
Mitsubishi Corp.
Mitsubishi UFJ Financial Group Inc.
Mitsui & Co. Ltd.
Mizuho Financial Group Inc.
Monsanto Co.
National Australia Bank Ltd.
National Bank of Greece S.A.
National Grid PLC
Nestle S.A.
News Corp. Cl A
Nike Inc. Cl B
Nintendo Co. Ltd.
Nippon Steel Corp.
Nokia Corp.
Novartis AG
Panasonic Corporation
PetroChina Co. Ltd.
Petroleo Brasileiro S/A Pref
Pfizer Inc.
Philip Morris International Inc.
Potash Corp. of Saskatchewan Inc.
Procter & Gamble Co.
Q-Cells AG
Reliance Industries Ltd.
Renewable Energy Corp. ASA
Research in Motion Ltd.
Rio Tinto PLC
Roche Holding AG Part. Cert.
Royal Bank of Canada
Royal Bank of Scotland Group PLC
Royal Dutch Shell PLC A
Samsung Electronics Co. Ltd.
SAP AG
Schlumberger Ltd.
Seven & I Holdings Co. Ltd.
Siemens AG
Societe Generale S.A.
Sony Corp.
Southwest Airlines Co.
SunPower Corp. Cl A
Suntech Power Holdings Co. Ltd. ADS
Taiwan Semiconductor Manufacturing Co. Ltd.
Takeda Pharmaceutical Co. Ltd.
Tata Steel Ltd.
Telefonica S.A.
Tesco PLC
Time Warner Inc.
Toshiba Corp.
Total S.A.
Toyota Motor Corp.
UBS AG
UniCredit S.p.A.
United Parcel Service Inc. Cl B
United Technologies Corp.
Veolia Environnement S.A.
Verizon Communications Inc.
Vestas Wind Systems A/S
Vinci S.A.
VISA Inc. Cl A
Vodafone Group PLC
Wal-Mart Stores Inc.
Walt Disney Co.

Thanks SiO2, great work, as usual. And btw, I liked the interview on BNN :P

that's the biggest spinning globe logo I have ever seen sergio.

http://www.djindexes.com/globaldow/

mesmerizing.

reminded me of this site.

http://www.zombo.com/

without the methodology of course.

You can probably scratch off these ones from doing well in this environment.

Top 50 CDS holders by gross notional total, 10/31/2008

http://tinyurl.com/5r82tc

Interesting link from Now and Futures for the squashed gold bugs out there.

http://ebaypmx.com/

http://blog.nowandfutures.com

groosbank- overcoming anxiety...your perspective on things will undoubtedly be much different than mine, but i'll pass on a few thoughts, in no particular order:

(a) in 1970 (I was a high school sophomore), when my Dad moved the family to the Midwest, I left the Bay Area in the midst of a crush on a girl I had just gotten to know...I was devastated and angry at the worst break in my life imaginable to me at the time...

(b) in 1985 i was spending a lot of time hanging out with an African-American Michigan grad student who lived in the apartment below me...older guy who had spent his younger years playing the sax with various touring bands, and finally getting his life together...he met a beautiful Amerasian pre-med student, and got married shortly afterwards- they had two kids in quick succession, his wife dropped out of school to become a Mom, and he started a new career as a professional...in 1986 I visited his home outside Detroit a few times, where he and his friends would spend the evening and early morning hours making their way through an eight-ball...in 1987 his wife called me, and i found him sleeping on the steps outside his mother-in-law's house in Detroit...i think they finally moved to Jamaica and found some peace...

(c) life is unfair, we all know that...the guys in the Special Ed classes know it...the guys on Skid Row know it...the girl who got teased endlessly in the 6th grade knows it...what about the kid with cerebral palsy...the high school quarterback who's riding his motorcycle across a field to see his girlfriend when the handlebar comes loose, flips him, and he can't feel the pin pricks on his chest the next morning...the ugly duckling who grows up to be- an uglier duck...the guy who dreams of getting out of the dump he grew up in, and ends up taking care of disabled parents in the same dump...it goes on and on, man...

point is, i can think of many reasons to lose sleep...but a market decline (that happens to affect just about everyone else on the planet as well) is not even close to the top of my list..

will this pass? that's where they came up the trite but still very true saying about the darkest hour coming before the dawn...it always does...i got over that girl within the first week of starting at the new school...

Looks like those Cd's holders are a pretty lucrative business.
Must be a spin off from the $5,000.00 Haliburton toilet seats payed for by the U.S. taxpayers!

"but i still believe that deflation is not priced into the prices.

ie housing prices, energy, service costs, just wait, prices will continue to drop and helicopter ben's power is futile to these forces. we are already at zero interest rate policy, just that the fed funds rate isn't' their yet.... "

I am puzzled by something. I see many people discussing the great depression with great intellectual interest and excitment, evermore proposing new lows on indices and economic activity.

What amazes me is how everybody discusses these things jovially as if they expected to not be affected by it. Of course, if it happens, so be it, but I sear some of the discussions about a potential GD sound like people are... excited... even thrilled at the prospect.

How can we be so clairvoyant in predicting a great depression here but be so blind that even those who see it now will nto escape it. I, personally, do not believe gold, or other safe haven investments, will be of that much recourse in a genuine Great Depression environment. And even if it were, the prospect of a grim world where economic activity is all but stopped overtakes any beneficial prospects of a fatter bank account, at least for me.

I recently read a survey put 50% of those surveyed as believing we are in for another GD, worst than the last. Yet an astounding 75% still had neutral, or positive prospects for their OWN financial condition in the near future. Human nature is intriguing, indeed.

Am I missing something here? Why are so many people seemingly so excited about their own demise?

Just finished reviewing the day's action in currencies:

http://tinyurl.com/5f3lx7

As Bill would say, what a "tell". Was reading the Bank of Canada's Monthly Report by Paulson's mole in Canada last night.

http://tinyurl.com/6jegj9

As they say, 3 factors are "driving" the chaos in Canada. First mentioned was

"First, the intensification of the global financial crisis has led to severe strains in financial markets. The associated need for the global banking sector to continue to reduce leverage will restrain growth for some time."

The rest is just drivel that I reckon would follow from such a problem.

So basically it seems to me that "margin-calls" by banks, confirmed by ludicrous price fluctuations in currencies (read: +USD/ +++Yen / --- all others) is driving all this mess.

Specifically, after the parabolic move in the Yen , Oct 20- Oct 27, FXY has retreated smartly back to its 20Day MA , found support, and has reloaded for another round of carry-trade unwinding.

...starting to form an opinion on bounce vs breakdown here.

Am I reading too much into these price moves?

Groosbank "How did you overcome the anxiety? That is my problem now, the worry and anxiety."

I gave up on anxiety by accepting that I had to before I made myself sick. I eventually thought "what good is the worrying doing, it only makes it worse" so as the norsemen do I put my loss on my mythical boat, set it on fire and cast it off into the ocean, never to return (hopefully it will but I'm not relying on it. If it does its a bonus). So the losses have gone and the anxiety very much lowered. Having accepted the loss of past funds you now need to think about anxiety over potential future losses and can you cope with that. If you worry about that then you need to do something, either sell it all or a portion or take out some options cover (requires a specialist, maybe talk to Bill). Another thing you shouldn't do, if in fact you are, is feel guilty about the loss. Everyone around the world is in the same position, let that one go too. Remember the Beatles song "Let it Be", maybe a good one to hum in the circumstances (see lyrics below).

Personally I'm hanging onto what I've got left because they are good companies with now great dividends albeit they may reduce these in a recession. The stock market is no longer a good means of valuation (no volume buyers) and until it is anything could happen. I now just shrug on a big day down and think of the opportunity further downstream. Just make sure you have some cash to take advantage of it when it comes.

For most of my working life I've been a corporate exec, the last 20 years as CEO across a few companies but have been retired now for 6 years. I've always been a 'business hardarse' however recently I took up transcedental meditation (google-able)and yoga, both of which I find very relaxing in a physical, mental and spiritual way. My 18 yo son is worried I'm turning into a sissy, no chance! Maybe you could consider something like these to divert your worry.

Let it Be

When I find myself in times of trouble
Mother Mary comes to me
Speaking words of wisdom, let it be.
And in my hour of darkness
She is standing right in front of me
Speaking words of wisdom, let it be.
Let it be, let it be.
Whisper words of wisdom, let it be.

And when the broken hearted people
Living in the world agree,
There will be an answer, let it be.
For though they may be parted there is
Still a chance that they will see
There will be an answer, let it be.
Let it be, let it be. Yeah
There will be an answer, let it be.

And when the night is cloudy,
There is still a light that shines on me,
Shine on until tomorrow, let it be.
I wake up to the sound of music
Mother Mary comes to me
Speaking words of wisdom, let it be.
Let it be, let it be.
There will be an answer, let it be.
Let it be, let it be,
Whisper words of wisdom, let it be

Is anyone mentioning the elephant under the carpet? Bush could still cause a passle of trouble on this planet. Don't let the door slam on your way out pardner.

Good words 2nd. Do you ever wonder about that girl.....?

No..

"Seadog,
Half my portfolio is BRKA, which I thought was a hedge or cash equivalent, but it has come down with the rest of the market. The balance is in BP,Pfizer,Merck,DuPont,GE,Pepsico,BASF, and SPY. I don't see how I have lost so much money with these stocks, but I have. I hope they will come back. I admit I have trouble sleeping. How did you overcome the anxiety? That is my problem now, the worry and anxiety. Surely, this too shall pass."

This is going to sound weird... When I feel myself being fearful of losing more, I stop for a moment and imagine that all the money is gone already, a 100% loss... And oddly enough I feel a relief of pressure.

I was born with not a penny to my name. And ten years ago I had less in my account than what I can earn in a month now. So I think I can still survive.

I would still be quite sad, even depressed, if the money all disappeared, or dropped 50% again. But that is the risk I was willing to take when I bought.

Right now, I'm rather frustrated because shorting everything just seems soooooo easy. I've been short earlier this year and it was never lik

2nd_ave
I do understand your November 12, 2008 9:27 PM POST
But believe me; in reality it is very hard for some people. I look at my self and it happen to me for few nights. Next thing I did was put 40 stocks to sell at market and it took me 4 minutes to do it. After that I felt so good.
For some no matter how much they try to divert their attention about them being down in market it keep coming back and coming back.
I am still thinking, why just one of us here is not up 200 or 300% in this bear market. Why most of us have to be down (even if it is dowm2%). There are many instruments to play down side like short/put option/short ETF
Why are we all playing same way? I wish I can find answer?

Groosbank

A lot of us if not all have been there, life goes on brother, you have got to get it going, move on with what you have to fight another day, that day will come, as in my case with a lot of hard work, but it will only pay off if you do something about it, as seadog mentioned Bill has his services available, that may be a wise move.

2nd
About that girl
How can you forget her? First time I visited USA as visitor in 1968 met Jewish girl. Her parent wanted her to go out with only Jewish boy. But we kept meeting for my 3 month
20 year ago searching for her I found her closed by in Nashua N.H.
She has three kids and we still talk on phone once a week and my wife also met her

Vinod,
These markets are all volatilty plays at present so selling options as Bill has previously suggested is 'a' way to go. Over the past 6 months my options broker has my account up 700%, the magnitude of which 'begins' to counter my traditional equities account losses. At times like these I've found it best to hold my good stocks, withdraw from trading and let my specialist hammer away. His strategy is to create big profits when the prices fall or rise by a few percent (not difficult at this stage) but I lose money if prices remain in a tight band. I can't comment on the technicals here but if Bill reads this perhaps he could comment for the wider readership.

"I am still thinking, why just one of us here is not up 200 or 300% in this bear market. Why most of us have to be down (even if it is dowm2%). There are many instruments to play down side like short/put option/short ETF
Why are we all playing same way? I wish I can find answer?"

Because we all seek comfort into joining with people that share the same views, frankly, and this blog can be a form of therapy. I follow some bearish blogs, and the commenters are consistently bearish, because they seek comfort there as well. Once you've made a decision, bull or bear, there's no point in beating yourself over the head by lurking on blogs that keep repeating stuff you already know about the opposing view.

Bear markets are hard, even for bears. Somebody making money from this point on needs to buy shorts in a market that is already down 40% YTD, and agressively bet on further collapse. That takes a kind of personality that is uncommon.

Muzie- "I stop for a moment and imagine that all the money is gone already, a 100% loss."

there are more than a few people we all know to whom that has already happened...there are Vietnamese families in the Bay Area who arrived with nothing, immigrants from the Balkans, from China, from Central America- who have experienced 100% loss of capital, and in some cases, loss of faith...

every religion in the world notes that we leave with nothing but the legacy of how we lived our lives...

where did the Great Depression leave those who experienced it in the thirties? and what makes us think we are somehow 'entitled' not to experience one? we are NOT exempt...we certainly went out of our way to set one up, and if that's what it comes to, i don't think we get to "bail ourselves out" that easily...if it happens, we may as well accept it, and begin taking the necessary steps to deal with it..

Vinod, great post.

Might it have been the alleviation of fear that made you feel so good after selling all those stocks. Fear is a primal emotion, stimulated in our evolutionary past by life-threatening situations.

As to being up +200%-300%, I suspect there are some readers of this blog who ARE in this situation. But as Bill has said, better to say "keeping my head above water". After all it's all relative. Those Vulcan-like winners work hard for their gains, unlike some HB&B honchos who do a pathetic job and then get to collect $50 million bonuses for their incompetence.

Vinod I wondered that myself.
"I am still thinking, why just one of us here is not up 200 or 300% in this bear market. Why most of us have to be down".

I think the answer is in that Hulbert article:

"In essence, these advisers came face to face with John Maynard Keynes' famous pronouncement that "the market can remain irrational longer than you can remain solvent.""

"But believe me; in reality it is very hard for some people. I look at my self and it happen to me for few nights. Next thing I did was put 40 stocks to sell at market and it took me 4 minutes to do it. After that I felt so good." - vinod

I did the same thing. On September 19th I couldn't sleep and sold all my SHORTS (50% of folio) in a few minutes after the big run-up. I felt so much better at that moment. I only kept my "safe" stocks, that hadn't moved at all the past few months.

And then the REAL nightmare began, and my life was scarred.

Selling isn't the answer. Yes, if you happen to be lucky and your move is the right move, you will feel better.

Sell if you have reason to believe that is the right to do for your money, using whatever method.

Don't sell for "relief" - if it turns out to be the wrong move the relief will not last and the pain will be doubled.

Seadog,

It sounds like your broker is doing straddles, Much like SIO2. I am sure SIO@ is up significantly since september, but too much of a gentelmen to brag. I just wish I followed that strategy.

The only way to stop the slide is to work on the root of the problem. This is what I believed and said here a long time ago. Stop the housing price slide and everything else will correct.

Why hasn't Paulson or Congress done anything like this? He's trying to save his friends, that's why. He is coming to realize that his friends are only burning the money.

vinod- LOL...there are a few girls i have not forgotten, but why play with fire; the fact is i married just one of them...

Muzie- I have to disagree...there are both bears and bulls on this blog, and we argue all the time...I really believe both sides end up profiting about the same amount- the game is hard enough to play, and the percentage of losing plays (as well as the volatility) high enough to almost guarantee no one walks away a clear winner...

Exactly, CP. I have a sheet of the names of 100's of ETFs I keep on my desk and back in February I circled RWX and wrote in the margin: "The key?".

But how are the brakes put on this?

Just for record
I might start to load up again when i feel it is the time again to buy in
i am 100% cash now.

"where did the Great Depression leave those who experienced it in the thirties? and what makes us think we are somehow 'entitled' not to experience one? we are NOT exempt...we certainly went out of our way to set one up, and if that's what it comes to, i don't think we get to "bail ourselves out" that easily...if it happens, we may as well accept it, and begin taking the necessary steps to deal with it.." - 2nd_ave

I would, though on the other hand it is by no means a necessity that our generation must be required to go through a Great Depression.

There are some who see another GD as a retribution on those who brought excesses in the system. But I don't see it that way.

Right now, stock market losses far exceed housing price losses, and thus stock market investors are more hurt by the crisis than houseowners.

For 99% of us, being in the stock markets means it's money we have saved and invested. The stock market is in great part the money of savers. Savers are the antithesis of what caused this crisis. They didn't cause this crisis. So the view that stocks must go down "to pay for past excessed" makes me cringe.

The ones at the center of all this, the famously insolvent homeowners, stand to gain the most here. Those who never saved a penny to their name, and used the housing bubble to parlay themselves into a home, will likely get to keep it when all is said and done - or at worst, bankruptcy will be declared, and they will simply end up where they started: no saving, and the same bad credit they started with. If you make sure you have no money of your own and maximize your use of other people's money, then you can virtually guarantee you will be unscathed no matter what happens.

There's a lot of talk about how Wall Street caused all this, and it may be true. But Wall Street will never "pay" for past excesses - they are too well connected and have too many methods inaccessible to us to shelter themselves and their capital; the institutions may crumble but I bet you you will not hear a single story of a rich Wall Streeter becoming destitute in a real sense.

Savers are taking the brunt of the carnage. Ironically, savers provided the capital so fraudulent homeowners could run away with their money.

So, in a sense, I'm very weary when I hear claims that "we as a nation must learn to become net savers". Hmm, well I've been a net saver for ten years and look where it got me lol :-). This crash vaporized all profits and took a good chunk of the saved money as well.

Vin,
Two factos:
1) Bull-biased Group-think
2) Divergent views stated by persuasive lectors

Vin:
add: "factors" for few 200 percenters

Re: Holding in the face of losses

I visit trader blogs regularly. Not necessarily because I want to follow their trades (I find most are rather clueless on fundamentals), but I like the brash openness and honesty of what they do - plus it takes some bravado to do it.

I give you a quote from one of the commenters from today:

"the crooks on wall street can b*** me im young and have time to my advantage; i'll hold onto the longs i bought today until im green in the face and in the wallet

:thumbsup:"

I couldn't help but laugh at this comment.

If someone is going to be long in this market with any conviction, I believe that comment perfectly reflects the attitude you need to have. Just frame this and put it on the wall somewhere :-).

Muzie,

I did some studies of Canadian Asset classes during the summer - and I believe it's even more relevant to US investors - conclusion was that nothing beat 100% long bonds over an, approximately 25 year period. Of course, the conclusion, for me, was muddled by various inconsistencies in returns over different time frames and the fact that one could jigger-up a portfolio whcih back-tested with optimum returns and minimum volatilty that likely had no chance of any forward-predictability.

Point is, you work hard, save, and want to allocate your savings appropriately. Maybe gung-ho equities don't align with your efforts?

Muzie- I pretty much agree with all comments in your 1018pm post...keep in mind that the consequences of being bailed out go beyond the financial...and that past behavior is unlikely to change as a result of a bail out...

we all (willingly) make sacrifices for our kids, for our friends, for our country, for our religion...personally, i don't feel as if i was put on this planet to (necessarily) judge my neighbors...i'm thankful for everything i've been blessed with, and i don't have a big problem with making a sacrifice now on behalf of "fraudulent homeowners," who may or may not have been talked into a losing proposition; it's just part of life..whether i happen to spend my time here in the midst of a 2008-12 recession, or a 2008-12 bull market, isn't really my call...so we take the hit for some unfortunate decisions- is there really a better alternative?

Long bonds over 25 years or life in prison...um I'm thinking....

Muzie
.
What worried most of us are manipulation of market and various sector of market with our money? If there is winning they keep it (HB&B). If there is s lose we get it
Most 401K is where they were at 10 year ago. I just show talking head on CNBC advising to buy the market and you will do well in three year. No one asked him, it has gone no where in 10 years
Politician/banker/economist is in bed together and robbing us .that is what so pain full.
And we can not do anything about it.
Original intent of bailout was homeowner and homeowner is last one they might help.
I spend couple hour with mortgage broker (friend) and asked about new plan by fnm/fre.
And was told there are many string attach to it. Only people with knowledge/information and connection will get it. Rest not going to be help as fast as needed. Plus they are going to go through hell to get this new relief.

Jaketh- LOL...so, if you were headed for 25 years to life in prison, with no access to your portfolio, would you be long or short?

Grym - If we are living in a deflationary environment in the future, then how would a college graduate go about buying a home? Please describe the process, I'm trying to grasp the concept one step at a time.

2nd - How do you know Jaketh isn't already in prison?

i see only bears and battered bulls on the blog tonight (all of us going off on tangents are, of course, battered bulls)...which, IMO, increases the odds for a 1500 point thursday rally...now THAT takes bravado, LOL...

gawd, that's some ugly numbers coming out of Asia tonight....except China.

Has anyone else noticed how "out-of-step" the China Markets have been with the rest of the world the last 1-2 months? I'm not talking about just post-stimulus announcement. Seems to me that when all the world is in the red, China's up, and when we had that last rally, day after day, China was, each day, in the red. Is this what happens when your government conspires to restrict your information exposure to the rest of the world?

Or perhaps...since China was the first market to tank (in early Nov), they are leading the way out of this trough? :P

CP- LOL...I'll let Jaketh reply to that one...

Muzie - Buy low and sell high, right? If one waits long enough, the price will eventually be higher in an inflationary environment. No one can pick a bottom.

Of course, their are perhaps other more-productive strategies.

The one I like is the trader who converted himself into an investor.

vinod: There has always been manipulation, but that hasn't prevented powerful bull markets to happen. I'm not sure manipulation by HB&B necessarily implies that somehow they've been planning for being dead in the water for 10 years. I can somewhat concur with Bill's views on HB&B moving the markets & manipulating them, but I personally don't see them having any kind of concerted plan over a period of more than a few weeks/months.

About helping homeowners, vinod I suspect you are not enough of a "deadbeat" to qualify :-). The plan is intended to help the fringe buyers, who should have never had a house, and will cost the bank money as they are almost guaranteed to default. I suspect if you cannot meaningfully prove that you are the worst deadbeat there is, you will not get help from the program :-).

I wasn't there, you know, when that final "death of equities" article was written before the last bull market. But man, if this doesn't feel exactly like that right now, I don't know what does.

I hear all this talk about the Great Depression, and it's possible. But... when I look outside and how we live today, I can't help but think "what a bunch of pansies!" :-). We're nowhere near that level of pain now. We've got at least FIFTEEN points (twenty if you go by the "official" numbers) to go as far as unemployment goes to reach anything resembling the GD. We're not even at the level of the last big recessions.

I will be amazed if we get another GD. Why? because that would mean we actually had a majority of people saying it is coming (as right now), and somehow people would just stand by and do nothing to prevent it. A GD isn't some random act of God that happens without recourse - it's people unwilling to trust the economy and each other, to the point people are unwilling to commerce with each other. If the GD happens, we would be creating it right now, by our collective action.

"Of course, their are perhaps other more-productive strategies.

The one I like is the trader who converted himself into an investor.
" Chickenpookie

Yes, I do not argue that being long right now may not be the optimal strategy for all people.

My comment was mostly that if your strategy is that you are going ot be long, and that your rational analysis pushes you to be long, then the emotional mindset that you should be in shoudl be similar to that trader's comment.

Wow, TNA really tanked today, coulda probably made more on that in tomorrow's rally than BGU...

"The one I like is the trader who converted himself into an investor." Chickenpookie

To to be honest, I'd put my money on an honest trader willing to commit and put his money where is mouth is than on a whole room full of economists debating whether we are in for deflation or inflation, any day of the week.

There's so many moving parts in the economy that how someone can point at where the whole thing is going with any certainty baffles me. And I'm also baffled by how many people consider themselves experts on the question, starting from two months ago.

This comment is not directed at you personally at all - I am merely observing.

Ok so think of this like a math problem. You're playing a game wherein you really can't control whether or not you will be right or wrong on any given play. The only aspect under your control is managing the sizes of profits and losses.

Further complicating things is the truth that although you may be good at guessing which plays will be profitable in advance, the stock market is enough of a bitch so that many events seemingly similar will play out differently at different times, confounding the guesser and negating an "all in" strategy from EVER being the right play, it's too risky. One must be diversified as to type of play as well as the timeframe during which one is in the market.

So how would you play this game as described above. You guess, but are right only about half the time or less. Your sole behavior choices are to buy and sell. What happens afterward is utterly out of your hands.

What is obvious is that in order to win this game your winners, when they come, must be significantly larger than your losers. And since there's really no way control the size of your winners, they sort of are what they are, provided you don't sell early and kill them, all you can really ever DO that's a winning move is...you guessed it...Cutting those losers nice and short. Make most of your losses small losses and you are on the road to winning. I know we all know how to buy and hold, so that part's taken care of.

Housing - I expect the plan will eventually settle on some kind of tax rebate and/or special rate for new purchases. They have to absorb the expanding inventory quickly before prices will stop falling. The longer they wait to do this, the bigger the problem gets.

Surely they realize this is how markets work (Supply and demand), right?

My simple plan is to make my losses smaller than my gains. I'd much rather start trading once we get a little higher on the Dow, the volatility seems harder to predict when we're down this low.

Muzie - I can understand everyone's probably tired of the back and forth on inflation/deflation issue, but come on, it will make a huge difference to many peoples investment strategy if they get it wrong.

Volatility and the general downtrend in these markets put a crimp in that plan, though, don't they Shark. I mean, with tight stops , the volatilty kicks you out fast. And the downtrending markets mean that any rallies are short-lived, so that letting your winners run means your profits evaporate fast. Maybe a day-trader can catch the turns and twists but can a "week-trader"? Or maybe I should say, a "weak-trader"?

"My simple plan is to make my losses smaller than my gains."

CP: This quote has the stuff of immortality, but you gotta change your handle.

hmm, that's not the first time someone's made a similar suggestion. Could it be this handle is too abrasive?

Not at all, just not suitable for framing under an immortal aphorism.......Which reminds me of one of my favorite Woody Allen quotes:
"I don't want to achieve immortality through my work--I want to achieve immortality by not dying."

"Muzie - I can understand everyone's probably tired of the back and forth on inflation/deflation issue, but come on, it will make a huge difference to many peoples investment strategy if they get it wrong." Chickenpookie

That, and if I knew if the SPY will be up or down next year I would be rich as well. But that is just as hard as calling an inflation or depression, imho.

There are actually many, many companies and stocks whose outlook is more or less independent on an inflation/deflation outlook. No one's going to buy more or less bubblegum because of inflation/depression (no, this is not an endorsement for bubble gum companies).

If it goes either way doesn't mean we have to bank on being investments that will be 100% right or wrong if one of the other happens.

I seriously I have read a lot of articles from many convincing people on the outlook for either. There's just too many unquantifiable factors to make a strong push to say one case is absolutely more obvious than the other.

Muzie - "Savers are taking the brunt of the carnage. Ironically, savers provided the capital so fraudulent homeowners could run away with their money."

I completely agree with your observations except for one thing: I don't fault the fraudulent home buyers, I fault the fraudulent lenders, regulators, and oversight committees. The last of these two are the best money can buy.

Muzie - So you're completely neutral on inf/def? I can't remember ever a time in my life when I had to plan for def., and always prayed for disinflation.

Regardless, most people have a huge majority of their wealth tied up in assets that are now deflating, right? What would happen to prices if those people decided to sell instead of sitting on deflating assets?

I sold two homes in the past year to avoid deflation losses.

Agreed, "Woodie Allen" would look much better on a wall!

"I completely agree with your observations except for one thing: I don't fault the fraudulent home buyers, I fault the fraudulent lenders, regulators, and oversight committees. The last of these two are the best money can buy."

Maybe... but it takes two to tango. There's certainly fault to be put on the regulators and fraudulent lenders, but there was a good ahre of people who knew they wouldn't be able to pay down the line.

Regulators and oversight committees are the ones I hold responsible for keeping the process honest, the ahre of people aren't responsible to the US taxpayer.

"Regardless, most people have a huge majority of their wealth tied up in assets that are now deflating, right? What would happen to prices if those people decided to sell instead of sitting on deflating assets?"

At this point, you have to either plan to get back in the market eventually, or your plan of ever retiring one day is dead, period. People will soon realize that fact after they sell all their holdings. No one's going to have enough to retire on some 4% CDs, and certainly not on 0.5% treasuries. If one accepts that, and everybody gives up on retiring, then fine, everybody's dead :-).

If you want to retire... Well, what's the plan? Maybe daytrading works now. So, what, the entire population daytrades, everyday, for the next thirty years? Of course, with no economic growth, it's a zero sum game, so it's unsustainable.

Eventually, whether we enter a great depression becomes a matter of choice: you either participate in the economic spending by spending or investing, whichever you prefer, or you do neither, and perception becomes reality as the economy freezes.

There is no investment strategy that is sustainable for a large group of individuals except the buying of sound securities. So I don't see things deflating to zero because everybody then accepts working themselves into poverty in old age.

[Bill Cara note:

Asia-Pacific equity markets are plunging. Focus on your survivors list of the highest quality and write puts. As this market drops further, your stock portfolio of highest quality companies will begin to fill with positions at prices not seen in many cases since the 1990's.]

"ahre of people"

hehe ya that came out wrong lol. Not sure what I meant there. Good number of people presumably.

I sure am glad I turned Harvard down, I couldn't stand the thought of being so smart I didn't know what to do and how to get it done...

http://tinyurl.com/6adeqe

Meadowlark Sings Again...

"The gubmint was going to buy bad assets and make a lot of money for taxpayers when they went up. Well, not so much."

2nd

I hope you are working your writing. I know zip about stocks, bonds, options and hedges, but I do know what I'm talking about when it comes to the writing racket. Keep at it.

CP:

Nice way to give yourself a pat on the back...

Muzie,
"I recently read a survey put 50% of those surveyed as believing we are in for another GD, worst than the last. Yet an astounding 75% still had neutral, or positive prospects for their OWN financial condition in the near future. Human nature is intriguing, indeed."
My son has a degree in statistics. When he was working for a firm supplying data for clients whose businesses depended on accurate info, his job was to protect data quality.
No survey is any better than its data quality. What is asked and how is important, as well as what is not asked. Unless you know these details, don't make important decisions on any poll.
In my own business I was once listed as refusing to hire women — I had NO employees.
I received a certificate for 100% participation in the United Way — I was the whole company.

CP,

How would a college grad buy a home in a deflationary environment?

Probably he would not.

My parents were married in 1933. Both were in their 30s and had worked for some time. (My Dad had to quit school to take care of his parents (his father had a stroke), one unmarried sister and a younger brother still at home.

The rented house on a farm at a very low cost. (The owner was in Joliet Prison for bootlegging — his farm buildings had never been used for anything except producing booze.) They could have bought the 200 acres with a half dozen new buildings for only $5,000. After the war it became a housing development for GIs.

They could even buy just the house even though both were working. Mom taught in a country school and Dad, who had been an office manager and bookkeeper at a brick plant was then the night watchman and kept all the fires burning.

The answer to our problems, IMO, is not how to buy what we want (restoring consumer borrowing), but cutting back to buying what we can afford. As individuals or jointly at all levels of government.

This is slow to be realized. Our city is currently admitting 10.5% unemployment and ignoring job quality of the replacements of formerly well paying manufacturing ones. Our schools are running ever increasing deficits, as is our city budget, the United Way is in trouble as are others such as the food pantry.

YET, the city council is spending $23 million to renovate the civic center which in 25 years has never had a year in the black and pushing the construction of a "River Walk" to "restore shopping in the downtown."

You asked, "...how would a college graduate go about buying a home"

My neighbor, a real estate agent normally sells 60 houses per year — she sold one in the first half of this year. The number of houses available here is at a record high.

CP,

How would a college grad buy a home in a deflationary environment?

Probably he would not.

My parents were married in 1933. Both were in their 30s and had worked for some time. (My Dad had to quit school to take care of his parents (his father had a stroke), one unmarried sister and a younger brother still at home.

The rented house on a farm at a very low cost. (The owner was in Joliet Prison for bootlegging — his farm buildings had never been used for anything except producing booze.) They could have bought the 200 acres with a half dozen new buildings for only $5,000. After the war it became a housing development for GIs.

They could even buy just the house even though both were working. Mom taught in a country school and Dad, who had been an office manager and bookkeeper at a brick plant was then the night watchman and kept all the fires burning.

The answer to our problems, IMO, is not how to buy what we want (restoring consumer borrowing), but cutting back to buying what we can afford. As individuals or jointly at all levels of government.

This is slow to be realized. Our city is currently admitting 10.5% unemployment and ignoring job quality of the replacements of formerly well paying manufacturing ones. Our schools are running ever increasing deficits, as is our city budget, the United Way is in trouble as are others such as the food pantry.

YET, the city council is spending $23 million to renovate the civic center which in 25 years has never had a year in the black and pushing the construction of a "River Walk" to "restore shopping in the downtown."

You asked, "...how would a college graduate go about buying a home"

My neighbor, a real estate agent normally sells 60 houses per year — she sold one in the first half of this year. The number of houses available here is at a record high.