Bill,

"Wal-Mart is a company many people love to hate, for some reason."

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

For a first-hand list of reasons, read:

“Nickel and Dimed,” by Barbara Ehrenreich

Wal-Mart treats its employees like a commodity — easily replaced by any other person who desperately needs a job.

My only experience is as a package designer when back in the 1980s a fastener manufacturing client of mine made a bid to sell to sell at WMT.

Any consideration of the consumer (who the product was for)went out the window. All info on how to use the products, what tools were needed, etc. only added to the cost and had to be dropped. Ultimately clear plastic bags with part number and type (Flat Hd, Slotted, 6x32) remained.

Even then, if anyone, anywhere, in any country beat the price — you're out!

Unfortunately, they became the role model for most big box stores. Even worse, the people whose jobs were lost at US companies catering to WMT demands to cut prices, became captive customers. The loss of income is a major source of lost freedom.

More Wal-Mart:
I know the markets are not moral, but for the same reason I don't buy stocks in tobacco (I finally gave it up after more than 30 years of stupidly being hooked.) won't buy into companies who treat people badly. Newell Rubbermaid is another one.

Is there a difference in participating in those stocks or in taking part in the purchase/sale of toxic mortgages?

Good morning.

Here are your Cara 100 Ratings Changes:

Upgrades:

DIS - to Buy @ Pali Research
MICC - to Neutral @ UBS

Downgrade:

KO - to Neutral @ UBS

New Coverage:

FSLR - Overweight @ JP Morgan (Analysts reading this blog?)

Price Target Lowered:

BBBY - from $22.50 to $18 @ Friedman Billings

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

Today's Market Music:

http://tinyurl.com/5ngv8o

It seems to me that the North American automobile industry has been and is being very nice to their employees in terms of wages and pensions.I certainly never had such benefits. But,I would not buy shares in the big three since they are certainly not prospering and may join the airline companies in bankrupcy.

Regads

Cara 100 Update:

Numbers Cut:

TGT - estimates cut at Credit Suisse to $45 from $50 to account for lower gross margins and comparable store sales. Maintained Neutral rating.

Oh great, the market drubbing tag team of Bernanke-Paulson are going to speak....to a microphone today.

I hope the market gets over it soon as I have to leave on business this AM and this is no place for indecisiveness. Or speeches from market wrecking mouth peices for the banker/brokers.

2 members of the triumvirate of stupidity and greed, both Bennie (the beard) Bernanke and Hank (the bazooka) Paulson are scheduled to speak this morning. It's been my experience that the market does not like it when either of 2 wise men speak. Both on the same day?....Fuggetabbbboutttit!

At least YHOO tossed out that moron Yang. Now maybe they can sell this search engine..I gotta thing at 12-15 bucks MSFT oughtta be interested.

BTW, I've never known this feeling but it must be a bummer to get fired and the next morning your stock's up 10%!

Scott Nations from Fortress was on CNBC this morning and indicated he thinks the PPT came in on Oct 10th and saved the S&P from further collapse...CNBC entertainers were beside themselves like this was the first time they had heard of such a thing. Mickey Levy dismissed it...Leisman dismissed as well...pretty interesting...

Rob

I heard that exchange.

CNBC sees no evil, hears no evil.......

Someone please, please, tell the Honorable Mr Frank that he has no idea what he is talking about....

Foreclosures are a problem but you can't keep housing prices artificially high. The system must be purged by the market, housing is still to expensive nationwide.

Good morning – The 10 year U.S. Treasury bond price improved to lower the yield to 3.61% - down from 3.70% yesterday morning. Continued stock market weakness due to slower economic growth around the globe is accelerating the flight to the relative safety of the Treasury bonds, bills and notes. Lowered inflation expectations are favorable for the 10 year notes, and with more funds seeking the higher return of longer dated Treasuries finding their way to the 10 & 30 year notes/bonds, which trend is favorable for mortgage rates. Today a 30 year fixed now at ~5.875 to 6%. Happy Trading

for what it's worth, the BDI (Baltic Dry Index) has been up for the past 4 days.

Looking bullish on the tape overall today.

HTE, since it was mentioned a few days ago, caught an upgrade from Citybanks and a new price target for 16, about 5 higher from its trade now. A trust that is positioning as an integrated, perhaps with ambitions of growing more.

Picked up 200 of JCP at the opening. This stock was $40 and has had a similar trend for quite some time. After going to Khol's and leaving with a terrible shopping experience this weekend, I recalled being at JCP last Christmas and was impressed with the outstanding customer service. It's Christmas time again, and I will be shopping at JCP. This price is very attractive to me and it is a Cara 100.

I just want to mention that in general, it has been way easier making money on the short side than the long side.

How many of you wish that every time you'd bought you'd sold short instead?

More naked shorting in ESLR today, aided and abetted by the crooks at JP Morgan.

Norm,

They are planning to completely stultify the housing market "permanently" by artificially goosing housing values nine ways to Sunday, ensuring that the decades-long affordability problem in U.S. housing continues.

SOMEBODY needs to read Shumpeter.

Shark and Rob,

Wouldn't it be interesting to know if the CNBC cheerleaders absorb enough of what they espouse to be buy-and-holders?

teamonfuego - BDI - That's worthy of mention, tks.

Got a dead dog in the yard? Put a T.A.R.P. over it.

I'm sure this is not a new idea, but why not short the worst stocks, and go long the best stocks in the market, and do this on a rotating basis (cycling through hotspots).

If you are 50% long, 50% short, you can remove market risk, and then all you have to worry about is picking the right sectors/stocks to go long/short. It is much easier to sleep at night knowing that if the market goes up or down it doesn't matter, and you can make money either way.

The last thing are pairs trades...if you like oil, go long XOM short SU. If it works out and you pick the right direction, close out the SU short. If oil goes down (or the market), close out the XOM long and ride out your SU short (obviously as oil goes down SU will fall faster than XOM because of oil sands costs), so you could make money here with very little risk.

I find it odd nobody on here talks about hedging or pairs trades.

Grym
Interesting you quote from “Nickel and Dimed,” by Barbara Ehrenreich. Have you read it? I have and as interesting read as I though it was, She (Ehrenreich) is very biased in her assessment of many co's, including WMT. Using union membership advocacy is hardly a solution and her left leaning crowing gets very tired. Am not a fan of WalMart but having said that,1)they give the consumer what they want and 2)if a supplier chooses their distribution network that is their choice, no one is obligating them to supply WMT.

navid,

When you say the worst stocks, do you mean the ones that are "going to" go down or the ones that have already gone down? Or by worst do you mean to engage in fiscal chicanery, i.e. fundamental analysis?

Bill,
I watched Ross yesterday and was surprised at his vitreol aimed at TCK CEO Lindsay. Like yourself I have been a fan of Ross for years and he has been a decent guest on BNN. Awareness of axes to grind is valuable if only to assess whether a critic has bias that tarnishes an opinion. Will continue to own/buy TCK AND listen to Ross.

Bernanke could read normal happy people their winning lottery number and they would become suicidal afterward.

shark_attack,

worst i mean quality wise. I mean in a fundamental, do you want to own this business type of way.

within a sector, I might say quality is XOM and not like SU (because oil sands is more risky short term). Not to say SU is not a strong company, my definition of quality is "do I want to own this business right now"

when I say "the worst stocks" i mean the businesses I don't want to own and see no future in. That would be like commercial real estate.

It is true that time & price are key, and you can make money on a stock with a bleak intermediate term outlook that's back is up against the wall - like Brunswick BC, I don't have the guts to do that.

I will only trade around a core belief. Like "commercial real estate is a bad business", and then I'll find the worst stocks in that sector... ie the ones with high chance of bankruptcy...i'll even go look at the books if I have to (though I need to learn more to spot the financial chicanery)

thats how I've figured it out for myself. and it seems to work well.

...small addendum ..."commercial real estate is a bad business" to be in right now and for quite a while yet...i'd be a fool to outright say it is a bad business.

To those who think the Auto maker buyout would do anything positive other than to those 'vested'interests.
"When people who earn more than the average have their "surplus", or the greater part of it, siezed
from them in taxes, and when people who earn less than the average have the deficiency, or the greater part of it, turned over to them in hand outs and doles, the production of all must sharply
decline. For the energetic, and able lose their inventive to produce more than the average, and the slothful and unskilled lose their incentives to improve their condition."
Henry Hazlitt
(November 28, 1894 – July 8, 1993) was a
libertarian philosopher, economist, and
journalist for The Wall Street Journal, The
New York Times, Newsweek, and The American Mercury

Wealth re-distribution whether in the form of bank nationalization' farm subsidy or income tax is a recipe for failure.

Any thoughts about the mini nuclear power plants that are affiliated with the Hyperion company? I believe they are private so no ticker to follow. Sounds pretty interesting to me and wonder who might be the companies to deploy the end product. More than likely it will be sold to the utilities.

The up-tick in BDI is small given Capesize, Supramax and Panamax indexes are all down by at least 90% from 2008 peak.
It seems to me the real question is, for any given carrier, what percent of their current and future capacity is locked in and at what average price. For one, GNK does reasonably well in this regard. But ships are expensive and every DBS company is in hock up to their ying-yang.
I love this industry but the demand for dry bulk shipping is in the toilet for now. I’ll wait for the BIC (note, not BRIC) countries to show some turnaround in demand.

Stox today remind me of Will Blake and "... this green and pleasant land."

interesting...

Bill,
Thanks for chiming in on TCK this morning, and more parable of the dance. I'm more comfortable keeping TCK on my dance card.

When should we expect Paulson or Bernanke to say something of positive consequence? It sure took Greenspan long enough to come to realization. I find nothing special about these men except their inability to speak and act in coherent manner. Tump's patented phrase certainly applies.

yhoo on the move...

Anyone know what's up with IBKR, down $1.84?

gold is at a critical price point IMHO,
it tried to break above $740 but is now consolidating just below.

a move above $740 on some strenght would be a good sign for a push back above $800 in the short term imho. i suspect many people are waiting on the sidelines looking to jump back in on gold when they perceive things are about to get moving.

if it starts to move it will probally be a self-propagating run with more momentum players looking to get in.

the gold shares have set their pattern: move higher on the upside and lower on the downside w/ the broad market.

w/ an uptrend in the market coupled w/ a move in gold the stocks may finally start to look good.

but i personally dont think things will be so bright for gold so long as the USD keeps its position as other currencies are facing crisis after crisis. the TA on the USD is looking ready to roll over but it looked that way several times before the past 3 months, so im less inclined to take anything from it. i feel as though TA is a false flag in the currency markets for short term moves.

i get the feeling many are thinking the same as me in terms of a huge move in gold to the upside or downside seems close.

good luck.
holding fast.

Maybe it would be a good idea to make a "Worst 100" list. If the market is indeed going to be trader's market for a while, short the worst on top and buy the best 100 in dips....

More Blake, this is not a bull or bear market but a "... tyger, burning bright, in the forest of the night..." and the "dread eye" and "dread hand" that dared "frame it's fearful symmetry" was ... who? Greenspan? Paulson? Bernake? Bear Sterns? AIG?

navid -
Commercial real estate is certainly not a bad business to be in right now for two important reasons:
(1) Banks deeply discounting property with superior terms to qualified buyers with 50% cash
(2) Levered (mortgaged) investments will hedge coming inflation if locked in at low fixed interest rates available today.

Cheers.

Cheers.

CZZ - Catching a nice ride on my averaged down Brazilian sugar/ethanol this am. Maybe the new administration will change the imported ethanol tariff structure. Still down, but its getting me there for the long haul. Happy Trading

Pretty sad watching the schills at Fox go after Peter Schiff, he is vindicated but can't imagine the number of folks that got sucked in by the other 'guests'
http://tinyurl.com/67otdk

yhooo looks to be busting up through the 20 day...long yhoo

"Wealth re-distribution whether in the form of bank nationalization' farm subsidy or income tax is a recipe for failure. "

There's two sides on every coin. Without subsidies US farming wouldn't have progressed to the extent it has today. When starvation rears it's head in foreign lands, it is agriculture which absorbs much poison from the wound. Every day this industry faces increasing challenge on the battlefield.

The energy and global warming issues we face must also be addressed from a subsidy perspective if we expect to avert eventual disaster on a global basis.

We must respect subsidies for what they are, and insist on performance to predetermined expectation.

Currently, it appears banking industry subsidies are not performing to expectation.

stopped out of DRYS at 9.15. Took a hit on shares purchased at 10.40.

Dr.Strangelove,

Indeed if you are a RE buyer, the deals are coming your way. Low interest rates, possible currency devaluation, desperate sellers.

But what if you leveraged yourself to the hilt to buy at top of the market prices (ie low CAP rate), based on a balance sheet premise of ever increasing RE values...with little risk premium in case your tenants can't stay in business...ie shopping malls. GGP is the paragon of this bad business model.

These jerks are going to talk about loan modifications until the market goes to 6000? For the love of God, just leave already.

Doc, the bond holders have not been sheared yet. Someone needs to be sheared and 10yr yields would go up, no? Short term, that may be not good for gold.

Some people take the current congressional testimony and media analysis seriously. Others like me see it this way (courtesy of The Onion):
http://www.youtube.com/watch?v=JnX-D4kkPOQ

Roseville - Hyperion - This may be a key technology for breaking the oil-sands deadlock IMO.

FRE + 34%

Took the other side of the trade (short) on DRYS at $9.

735 is likely the base for a rally to start from jmo 5 weeks so far at this level.

Interesting that usd is 7 cents above its Sept high and gold is basically even with it's sept low. Relative strength, and the two hr chart looks like a flag consolidating, just needs the usd to fall for a break out? maybe

http://img219.imageshack.us/img219/1813/rrrua4.jpg

Teamonfuego - Sorry to hear about DRYS. I've been tracking 6 dry bulk shippers for a long time and have had similar experience with GNK in the past. They've had a phenomenal run from 2006 to 6/2008. It's not a pretty picture right now, but be patient.

Chickenpookie -
Renewed U.S. farm subsidy merely erased taxpayer cost when ethanol mandate spiked grain prices. The farmer will tell you subsidy was replaced by mandated demand. No progress for the farmer.

Ethanol wastes energy and natural resources too. Reduces vehicle mileage, disrupts food supply, and requires more energy and resources to produce than originally anticipated.

Unintended consequences are critical loss of fresh water supply, more CO2 in the air, and farm subsidy that's meaningless.

DS - Agreed, ethanol subsidy was a poor choice, poor choices are made daily by public officials. Perhaps the mechanisms for making good choices need subsidy, as opposed to the current system.

BRKB down 10%??

This paint drying process is painfully slow.

RE: Shippers

I started picking up GNK yesterday. Apparently premature.

navid -
Commercial real estate is a great place to invest right now but, obviously, not on the backs of those Wall St consolidators (REITS, publically traded homebuilders and office/mall developers) that, with easy credit environment, overbuilt U.S. housing, retail, and office at 4% to 8% caps. Ideal time to invest in deeply discounted non-speculative commercial real estate with credit tenants at a 50% loan-to-value, 6% fixed rate for 30 years with no balloon or buy development land for pennies on the dollar.

re:DRYS
There is an economic slowdown that we surely all read about daily, so why would you expect this to turn around, unless you are willing to wait long-term, i.e. 12-18 months. This is the beginning of a recession - a worldwide recession. When I get close to break-even, my money comes out, until then I swing trade. I think some of you look at that 52-week high, compare it to the current low, and somehow think its going back to the high, or half-way, or even a quarter of the way.

This is my first posting. I have been reading this site for the past few weeks. Someone recommended this site to me during the summer and unfortunately I did not look into it then. I let myself be overly influenced by the perma-bears on CNBC and have seen significant losses. I have been trying to understand how to use the info in the Cara 100 effectively.
Does accumulation zone mean that it is okay to start buying a stock?
I guess a buy alert means just that.
I am assuming that there are corresponding alerts on the negative side (distribution and or sell alerts).
If a stock is in none of these categories - is that a hold?
Sorry for the basic nature of these questions.
Thanks

Bill Cara, thank you for the daily report and providing this great site.
Freedom57...good clip.
dr.cosa....colin twigg is saying the same. i unfortunately have an irrational fondness for gg and jr stocks so I either ignore what people I respect are saying or retire those funds invested in gg and lym from active trading to the buy and hope side of my portfolio. Hmmmm...isnt that one of the things I am not supposed to do.
peace

goldbug - i bought it only for a trade, thinking i could catch an oversold bounce similar to that of the casino stocks a few weeks ago. it was a bad trade and i'm willing to sell out of it knowing such.

Chickenpookie
I would also add subsidy allows producers of cotton, sugar, steel, etc. to extract huge costs to the consumer all the while crushing third world farmer/producers.
Subsidy is trade protectionism at it's best and serves a very small minority. Efficiency not subsidy has grown the production of farming. Government mandated management, subsidy, controls etc. serve to only bung the system up.

I'm surprised the market hasn't shown more interest in INTC today. I'm not an EE or techie but it sounds like they have the basis for the next iteration of personal computers which should be really big. Technically, the weekly chart shows them sitting on resistance that marked the low of their decline during the last bear (bottomed in Sept/Oct 2002)--and the yield is ~ 4.2%. Guess I'll have to sample some and see what happens from here.

From todays INTC Yahoo news........

“Intel has delivered the fastest desktop processor on Earth to the most demanding users on Earth, the ones who are using their PCs for video, gaming and music,” said Patrick Gelsinger, senior vice president and general manager of Intel’s Digital Enterprise Group. “When you couple what is Intel’s biggest leap in chip design with other incredible innovations like Intel’s solid state drives, the Core i7 processor has redefined the computer of tomorrow.”

Newbee,
This is like any other stock site in that everyone has an opinion & you know how the saying goes.
What this site excels in is humility & seat of the pants investing education.
Everyone hear will admit that this is a tough environment for investing.
You're best "bet" if trying to fall into the cara system is to paper trade it for awhile and get a feel for the inhabitants hear. Just my 2cents.
Gud luck,

Whats going on with SLW?

newbee, welcome. Did you click on the "more information" link on the RSI page? Gives a little more info. Bill has a cool little search function at the right on the opening page. If you put in rsi, first hit is Bills commentary from January 11, 2006 which goes into detail
peace

Thanks (and of course I meant perma-bulls on CNBC - oops)

BRC - As far as INTC, I think that until the extreme $USD strength abates, tech stocks in general are running against a pretty strong current.......long-term fundamentals are taking a backseat to short-term global demand issues.

Check out BC

BIDU - sticking in a bid at 120.

SOL - 3.37 bid

"This paint drying process is painfully slow."

Of course, you know this is usually a prelude to some volatile afternoon action. I see some bullish divergences on the intra-day charts, but not enough to convince me to try another trade here. Not yet anyway.

long SOL at 3.37

some are saying that if the auto industry does not receive some kind of aid that we will see an additional collapse in the markets. I believe that Bill is on record saying that he is for the aid, but I have not seen him comment on what would happen if it were not forthcoming.

[Bill Cara note:

Under the current consumer borrowing/spending environment, sales of all auto manufacturers have been dropping like a stone -- the worst operating conditions in 35 to 40 years. The Big 3 in Detroit are burning cash at such a high rate, and have almost no access to credit, so it's either bankruptcy or have Washington come to their rescue. In general I agree. But, I'd like to see them first declare Chapter 11 bankruptcy so that new interim management can enter the picture on behalf of the US government, which is the only party that has the funding resources that might save this important industry. There are two initiatives I have proposed for discussion: (i) a convertible debenture financing that would wipe out the current shareholders, bondholders, and boards of directors (who are the parties the Big 3 are representing), but protect the employees, pensioners, vendors, sales distributors, vehicle owners, and owners of the vehicle loans, etc. (ii) a $2 billion equity package to start-up a new Team Detroit Formula One Racing Company, which would be required to amalgamate the engineering departments of these three companies, and direct management to win F-1 races against Team Toyota, Team Honda, Team BMW and Team Mercedes, within a couple years or risk losing further support. In addition I would buy a US F-1 race for the Detroit area, and take a position that US automotive engineering center of excellence would be headquartered in Detroit (not Indianapolis). The Big 3 has become a disaster because of the failure in engineering more so than design. So, point (i) addresses confidence needed to attract risk capital, and point (ii) addresses the need to inspire the people to be proud of what they are doing. Rick Wagoner and his peers are not capable of bootstrapping a thing. They have to go. Change is needed. The Germans and Japanese have worked intensely for 60 years following terrible conditions after WWII to dominate this industry. The Chinese are coming on strong. The Brits, French, Italians and Indians are players. It's not going to be easy. If Wagoner and friends get their requested $50 billion, this slippery slope will become $500 billion, and then more, and ultimately Toyota or one of the others will own Detroit and with it about 10% of the US economy. What a dilemma: Beijing controlling the $USD and Tokyo in control of the US economy. Wake up America; help is needed, but not the kind Rick Wagoner is asking for.]

also, does anyone like apple in this environment?

[Bill Cara note:

How about you?]

re:SOL

10 day ATR is 1.11

sell stop 3 bucks.

Newbee,

Buy Bill's book. Work your way back through the Week in Review postings on Sunday. RSI is only one tool. Don't bet on it alone...Bill doesn't.

newbee,
Yday I visited Apple store and it was crowded. There is more interest in Macbooks/Ipods than Iphone. I guess apple is tradeable (buy at 85, sell at 95 types). But not sure how the iphone sales is going to play out

re: SOl

Pulled the sell stop, they jumped right over it.

correction: SOL, not SOI

bsi87:

hehehe-so your S.O.L. with SOL

little early yet, nemo. 5000x800

re:HNP in 17.34, 11/7, out today 22.40.

re:USG in 9, out 8.26

Bill - yes I like apple, unfortunately, I liked it from august on and have taken a pounding in it.
I am currently short $100 and $80 Leap puts that when I sold them looked to be untouchable. I am very nervous about these (I expect apple to be well above $100 a year from now - it is getting there that scares me).

A report out yesterday puts mac sales at record levels and iphone sales at 6 million for this upcoming quarter.

I know bill likes RIMM (I have $50 puts here also), and I think that apples fundamentals, management, and outlook are strong. But, in this environment, those things don't seem to matter.

Also, what happens if the autos don't get their "rescue" money?

newbee,

Check out this blog entry at Market Club regarding Apple. He says the double-top and triangle formation on the weekly chart suggests a $50 target! Great company and product but a lousy stock for now.

http://tinyurl.com/634wm8

[Bill Cara note:

I'd say the funds are being forced to sell AAPL. I have forever railed against the unfair advantage held by broker-dealers in that they know the answers to all the questions regarding forced selling. The broker-dealers all have analysts who (based on fundamentals) have set higher 12-month Price Targets for the majority of stocks, but the b-d trading desks are trading against the order flow, and helping drive prices lower. I ask you, why should a broker-dealer get to know real-time inside market information that you or I (or anybody at the SEC even) can't get access to. You want to know why few people actually trust this system? That's why! The broker-dealer that knows Mutual Fund A or Hedge Fund B is forced to sell Stock C is not going to use its own capital to buy Stock C. They will of course wait until A and B stop selling, and they will pick off the lowest prices. You have been watching Henry Paulson stutter and stammer his way through Congressional testimony. Without owning a broker-dealer, hence nothing at risk, he used the unfair advantage to build a personal retirement plan of maybe $800 million. When are people going to understand how corrupt the system is? The only way that people like you and me can fight back is by guerrilla trading. We focus on the high ground on the stocks of a few quality companies, then we float like a butterfly until we sting like a bee. Hopefully, with the attack of an army of bees, we'll bring down the elephants. That's our only hope in the market as long as it's structured to the Banker's advantage.]

Good article on how silver fundamentals improve as economic conditions worsen...

The worse financial and economic conditions become, the better it should be for silver, given how much by-product output could be lost. Investment demand should more than compensate for any fall-off in industrial demand. This could create a real silver shortage more pronounced than the shortage already developing. And remember, it does not matter what overall economic conditions may be, a shortage of anything guarantees sharply higher prices.

Let me outline a scenario that looks increasingly probable. If silver does experience the shortage that I think is at hand, its price should move quickly to $20 or $30 or more, especially if the big COMEX paper short refrain from new short selling. But if base metal prices remain depressed, as is likely in a recession, there will still be a loss of by-product silver production, even though silver prices had moved sharply higher.

http://tinyurl.com/2clju

I'm wanting to improve my visibility to intraday divergences, I've tried 5,10,15,20,30 minute time frames with RSI for example. I've tried candlestick and lines charts for price (line charts make it easier to see divergences). Anyone have any favorite timescales and signals for spotting trends intraday and within a 2 day timescale. What do you find useful? (btw, I'm using my broker's trading software)

Watch for OEX to hit under 397.
I think at this point market going to take off.
I am waiting for this, and plan to start loading up

thanks, looked over the info, it is scary - hard to reconcile with the increasing iphone and mac market share in addition to the ever growing cash balance. If he is correct, then this would imply to me that overall markets would be expecting to decline significantly as well (or that apple is still viewed as overvalued relative to the market). After all, if a popular, high-growth company with an excellent balance sheet would be expecting an addition 50% loss, then what happens to everything else?

SOL seems to have taken off... solar-powered planes don't seem to fly too well yet.

Newbee,
Good question. It you see the stocks that are getting heavily hammered (GOOG, ISRG, FSLR, AAPL, CME), looks like market doesnt want to pay 20X P/E multiples anymore. Its becoming like 5X multiples. Maybe growth premium is gone....

closed DRYS short at 8.30 for a .70 gain.

short GG thru small amount of $17.50 Nov punt puts

fireworks:

no hard evidence has yet to be produced that supports COMEX default for gold or silver delivery.

the only evidence is a circular round of backslapping gold-bugs that quote eachother in citing "looming" defaults on the COMEX.

gold and silver are falling in price and dont look to be changing direction.

what will happen when november 28th passes and the comex is still standing and gold has fallen more? will we simply state the default will happen in december? january? february? march?
what about impending hyper-inflation that will skyrocket gold thats just around the corner?
will we be saying the same thing 6 mohths from now? or will a new round of gold bugs fill the gap the old ones leave behind when their margin comes calling?

do you not see the foolishness of these theories that have no basis in fact?

the price is falling for PM's, and the shares arent doing too hot either.

gold does look good long term, but until long term alot can happen, and so far thats been bearish, and does not look ready to change vis-a-vis objective information.

Re: Apple
Many believe that Steve Jobs' health and vitality are key to Apple's successful future.

I am an 8-year survivor of the same type of pancreatic cancer that afflicted Steve Jobs. We both had an islet cell neuroendrocrine tumor -- which is a rare and far more curable form than the most common pancreatic cancer, adenocarcinoma. Adenocarcinoma is the most deadly cancer in the U.S. with about a 2% survival rate after three years. I had the Whipple Procedure, an 11-hour surgery, with no chemo or radiation before or after. Surgical cure. The surgery is a big bear of an ordeal. I lost a lot of weight and had bouts of anemia in the first year. I'm now pre-diabetic and do not digest oily food well due to lack of enzyme production by my pancreas and therefore take a pill.

Pancreas does three things: Produces enzymes, hormones and insulin. All three can be affected by the tumor and its removal.

Mr. Jobs health looks good to me. He probably is now a diabetic or near it which makes him thin. If the cancer were around, it would have killed him long ago through metatisizing into his liver (yellow skin) or brain (confusion/peronality changes) prior to his diagnosis.

Hope this helps. Go Steve!

Bill
That is a very nice plan for the survival of the auto industry, perhaps the people that have the president elects ear will have a peek at it, in the mean time waiting for teck, yamana to come to me, a few years ago when i started trading i would have jumped at the price bump, patience has improved my trading greatly, my recent purchases of Noront and SLW are holding up rather well.

http://tinyurl.com/5csfye

this was added yest to change.gov, platform for obama.

subjet: Alternative energy and his focus on it. this topic and industry is not going away for the next 4-8 years.

i believe i just picked the wrong time. i am always too early.

Dr Strangelove - thanks for the info on Steve Job's health. Media doesn't seem to explain this very well. Good luck to you.

Regarding apples multiple:
(Analyst CharlieWolf: ...Notes, however, astonishing news was non-GAAP EPS, which treats iPhone on a
sales rather than amortization basis; on this metric, AAPL earned $2.69. Says with
$27 of cash subtracted from share price and Q4 GAAP income annualized, stock
now trading at less than 6x non-GAAP EPS. Maintains $240 target.)

So, is apple really a 6X multiple stock or a 20X multiple stock.

Also, due to the accounting of iphone sales, would not the iphone revenue be like an annuity building up over 24 months?

dr.cosa, I agree that the price of precious metals is dropping but this is the "paper" price of precious metals and not the "physical" price of precious metals. There is ample evidence of the decoupling of "paper" vs. "physical" prices. Check out the unprecedented demand for various forms of precious metals from any coin dealer in North America or Europe. Also, the physical prices on e-bay reflect this decoupling as well.

Never before have physical inventories been depleted to such a degree since the late 1970's. However, this time, the depleted inventories have simultaneously occurred with a FALL in prices. But then again market dynamics are much different today than in the 1970's.

At any time though, I would not be surprised to witness a mega move in precious metals in the future. A move down is always possible but more unlikely because physical buying generally sets the floor in prices and physical buying is more than evident at the moment.

Cheers, Fireworks

Teamonfuego - I apologize for my previous comments on DRYS. (seriously - who am I to question; I think I'm a bit testy lately).

We are getting perilously close to October's low on the Dow and the S&P 500 is just below 840 - does anyone see a bounce from here.

(Personally I cannot bring myself to go short at this point - just too many good companies being sold down river. This market sorely tests one's patience).

Re: Detroit Big 3

Bill,

We should create a technology-advancing racing formula like CAN-AM again to showcase U.S. ingenuity; not run an F1 team! Nationalize NASCAR and toss the rule book away!! Take Indy by eminent domain!!!

Ford recently ran an F1 team and, after years of poor results, it sold the team to Sir Jackie and it eventually folded. F1 has a long history of being dominated by Eccelstone's greed and Ferrari's engine-development rules. Big gov't could never compete in that environment.

no worries goldbug. just keeping it honest and trading quickly. thus far over the past week i've made money on LVS, lost it on DRYS and SRS (how i did the latter is beyond me), then made money on DRYS (short). net total is up about $250...whoopie!!!

goldbug58,
"Personally I cannot bring myself to go short at this point"

Thats what I thought too when it tested 8200 last week and closed out all my short positions & bought a few long positions. And the next few days, those short positions zoomed up while the long ones are cratering.... Tough market. I think I will probably wait for a solid bounce to add to any longs.

uyg just getting pummeled..ugh

Vinod,

re:"I think at this point market going to take off."

I just bought some FAS @ $28.00, XLF calls (Nov $11 @ $.80)

Might buy some OEX calls for Nov.

I hope you are right!

Ok - now is the time... we need a rally.

on sound...
turn up the volume!

http://tinyurl.com/54uux6

Sign of the times: Holiday gift cards

. . . "consumer advocates warn that store gift cards are the gifts that may stop giving."

"If you buy a gift card from a retailer that goes bankrupt, it's uncertain when, or if, it can be redeemed, experts say."

http://tinyurl.com/66dbpe

We need "Monkey"

Bill,

Won't letting the automakers file ch 11 trigger huge amounts of CDS's, potentially bringing down anyone that wrote them?

Won't it also put many suppliers out of business? And this to cause yet more CDS to be triggered?

Won't it also put all the retirees into PBGC, causing them to receive 25% of the amount they had been promised?

I don't advocate a bailout, but I think we need to look at eliminating the systemic danger the CDS's pose before they take everything down the tubes.

[Bill Cara note:

Chapter 11 is a legal standing the terms of which can be worked out with the courts. I'm not a lawyer, however, I do know how to think through the issues and I know that current management is not the solution and should not be a part of the solution.

With respect to my plan for a single engineering company for the Big 3, I just heard an interesting comment to Bloomberg by ex-Treasury Sec John Snow (now CEO of Cerberus Capital Management), which is up to its neck in this deal). He says he wants a single R&D team for the Big 3. Call it the Cara Plan. Let Washington seed it, with strings. I'd love to see a Team Detroit Formula One Racing Company as the prime thrust of a new R&D Detroit venture. But position them to win or else. Losing is not an option.]

are we pricing in no GM bailout, or rather, the effects of the inevitable - ie GM's business is not viable in the current form (bailout or no bailout)

??

The market seems to have broken through the October lows. John Hussman said that at the 780 level for S&P 500 the value investors will have a strong motivation to buy. So I just sold 1/2 of my VLO position and 1/2 of my GG position, significantly reducing my margin debt so as to withstand another 20% plunge in the market indices. I'll start buying again at the 780 level for S&P 500 whichever stocks will seem like the best bargains at that point.

[Bill Cara note:

The end of the 2000-2002 Bear was an unsettling affair too. The S&P 500 had a 775 low in Jul-02, then lifted to 924 in Aug, then down to 768 in Oct-02, before lifting to 954 in Dec, and down to 788 in March-03. So it took 9 months to birth the new Bull, but after the July 2002 low was put in, it paid traders to stop thinking bearishly and start to think in bullish terms. We're in that cycle bottom trading range now. I think it may last from Sep-08 to possibly Feb-Mar-03. The risk of missing the first full leg of the new Bull (typically a big one) is high so, even though I am as nervous as the next person, I am also positioned in options to be able to catch that move as well as collar the risks. This is a market environment that will test the mettle of even the best traders.]

David - not quite, at least using the charting service I have. I've got 1428 Nasdaq and 818 S&P as the absolute lows, and so far they're holding (by 1 point! on the Nasdaq).

I'm not questioning your decision to not be on margin at this point though!

Chicken,

I agree about Hyperion being a solution to getting oil from the shale. In addition, if they want to bury one in my back yard, I'll gladly accommodate them. They can dig the hole for the reactor and leave a nice swimming pool in my backyard in the meantime. I did read somewhere recently that the reactor should run from 20 t0 30 years, as opposed to the 5 years Hyperion is saying.
Technology such as this, in addition to solar and wind are what's going to drive the next expansion of our economy. Instead of building humongous facilities, we will have smaller diversified installations serving the local population.
Switching over to electric vehicles is going to require a whole bunch of copper for the motors. I'm seeing the glass half full.

Re: Detroit (or any other big ticket consumer discretionary item)

People who are losing their jobs, and are paying more for the necessities of life, cannot buy what they cannot afford; especially when unsecuritized credit availability is also decreasing.

Prices have to come lower or wages have to increase. I don't see the latter happening ...

yvrapx,

Yes, I have read it and whether or not a union is the answer or not, the treatment of employees she talks about is pretty disgusting. Other places she worked we as bad or perhaps worse, but still there is no excuse IMO.

Giving people what they want is arguable. In my city we have lost thousands of very well paying jobs. This means many people have no real choice other than to buy the lowest price. This is a self feeding down ward spiral... the more factories which moved to China, Mexico and South Africa, the more people could only find part time work without benefits. Smaller suppliers to these manufacturers at best stopped hiring new workers, or worse had to start laying off long time employees.

Some of my clients — the fastener company I mentioned plus two others, a cabinet hardware maker, drapery rod company all were squeezed to the point of going out of business or need to merge with others in the same fix. No, they were not "obligated to supply companies like Wal-Mart — at first — but later there was no one left. Look at Sears, Wards and other long time retail stalwarts for example. Either gone or a mere shadow of what they were.

Their need to buy where they got the most for their dollars led to the closing of many small retail businesses. The other discount and big box stores closed our neighborhood pharmacy, independent hardware store and several book stores.

It has now affected my dentist and barber with people going longer between visits. As consumers we have far fewer alternative places to shop and much less in the way of service.

When they told us we were going to switch from a manufacturing to a service economy, most of us didn't realize it would be self-service.

You might also read the book, "Selling Ben Cheaver." The job losses and lower job quality have been largely ignored until now. Most were never considered to be Too Big to Fail. We've been losing millions since NAFTA and even before. All of a sudden the banks and autos got media attention. Perhaps Kudlow, Cramer and a few others who touted free markets, no regulation and globalization just had an ox gored.

where will the decline end - CNBC says that there is low volume and that there is a shortage of buyers. Are buyers waiting for a bigger drop or has everyone been scared out of the market (wish I had panicked sold at several points in the recent past)

sold GG puts for a whopping $0 gain...actually small loss with the broker fees...

Ah, so that's what the market was waiting for in order to turn around at October lows and start a real long-lasting rally -- it was waiting for me to sell some positions at a loss! Glad to be of service... :)

calvino,

Last time rates were hiked the 10 year only went to about 4.5%. I'm doubtful Bernanke CAN reflate, but he will keep trying if not with rates then through Paulson with the printing press.

Banks may be holding on to their cash due to far more exposure to toxic junk than they have admitted — or can be sure of.

newbee
Dont you just love it when cnbc says its east, cause its west that im going, picked up teck on the TSE at $6. Cdn., $5.73 was the intraday low the other day.

looks to me like we're flatlining now since 1:30, and won't go down from here...based on watching RIG, AAPL, SLW, and my shorts

is it time to sell out all long positions? someone on cnbc said that we could get as low as 700 on S & P. I have been sucked in over and over this year. It is hard to know how our service/consumption economy can work. Also, given that the consensus view on global growth/de-coupling being broken stories (boy, did that cost me alot), what does this say about the future shape of the US and modern societies. I am always trying to be an optimist, but being an optimist got me totally creamed in stocks this year.

RE: [Bill Cara note: The only way that people like you and me can fight back is by guerrilla trading. We focus on the high ground on the stocks of a few quality companies, then we float like a butterfly until we sting like a bee. Hopefully, with the attack of an army of bees, we'll bring down the elephants. That's our only hope in the market as long as it's structured to the Banker's advantage.]

I was trying to buy good companies and hold them for a reasonable time. Is the only way to do this is to focus on a few stocks and trade in and out?

Once again on the automakers, if they don't get the money quickly, are we in for another massive drop in the markets?

headline seen on marketwatch -
"Miners digging a deeper hole"

its a little funny, but where do they get these SOBs from.

Seems to be pretty skinny volumes for the late day kicker

Bill - Healy and WMT

GREAT illustration of the need for all opinions about stocks and markets to be tentative. A la Keynes, when facts change, so much opinions. And what more compelling fact than a sustained price rise!

In SLW at 2.86, 4400 shares.

Apologies in advance if i sink it.

bought $45 puts on RIMM at 1.55

Bill,

Your ideas for the auto industry show a well reason and innovative approach to a long festering problem. Perhaps were it not for decades of developing a congress devoid of imagination or of even the ability to recognize it such a plan could turn things around.

Anyone aware of the inventive history of the industry is amazed at how low the bar has been for management in the field and for how long.

Many of the manufacturers who were my clients, realizing their product lines were subject to swings, search for or developed other markets with counter or less volatile patterns. To the autos diversification has meant more models and costlier options or — simply buying another auto maker.

GM's move into the Humvee/Humer class is a classic example of idiotic managing.

RE: [Bill Cara note: We're in that cycle bottom trading range now. I think it may last from Sep-08 to possibly Feb-Mar-03. I am also positioned in options to be able to catch that move as well as collar the risks. This is a market environment that will test the mettle of even the best traders.]

I can't sit in front of a tv / computer full time every day. Is it best to be out of the market entirely if you can't babysit your positions (mine seem to constantly be moving down)?

Grym,

how about we start with the Job creation act of 2003.

6000 lb vehicle tax deduction, that could have be written off for business purposes...

got to love lobbyists... meaningless tax policies promote trash and encourage inefficiency.

i liek bill's gm suggestion as well. we dont need a gm flag dealer on every 1/4 mile of the main road. and in addition, they should be forced to make cars we want and conserve energy.

I am pretty sure GM could make a 70 mpg SUV and a 70mpg mini van if they were forced to. and the 1st car to roll off the new assembly is the corvette of the future. Hybrid/gasoline, 50 mpg, 500 hp/550 lb torque, $55k msrp. and just use the parts from the Zr1 for the chasis.

Grym
Well the treatment of employees is covered by Federal and Provincial labor law in Canada. Unions generally bully the company into submission as the rights they claim to have 'earned;' are actually in the labor code. We haven't near the employment market flexibility as the US so in many cases jurisdictions that are relatively affluent here have their 'excess' transferred to those areas that are not. Thereby ensuring the status quo remains. Ehrenreich is succesful at pointing out there is a significant underbelly in the unskilled,low end of the US labor market. What she fails to take into account is the very people who don't want to pay 'market' prices are the ones driving jobs offshore into lower cost jurisdictions. Yes, the job chain is affected, as is the tax structure of an economy relying on service vs manufacturing jobs. Wishing for the good old days of high wages and little competition is pretty much over and until people vote with their pocketbooks vs paying lip service it will remain the same. Treating NAFTA and foreign manufacturing like bogeymen do little to advance change from the domestic front.
IMO, if those in the West, not just the US, want to preserve their standard of living, good luck, there is a demographic in Asia that isn't waiting for us to get our act together.

On a political note...

At today's congressional hearing featuring Hank, Bennie and Sheila from FDIC, an Ohio congressman, exposed the takeover of National City by PNC Financial. Although Nat City met or exceeded all conditions imposed upon it by the Treasury, a forced sale was imposed. A Mr. Dugan, comptroller of the currency, who previously worked for PNC, arranged for PNC to acquire National City on October 24 for $5.2 billion. As part of the deal, the government provided PNC with $7.7 billion in bailout money. PNC is the nation's fifth-largest bank. National City had been in business since the Civil War.

Hank stuttered and said he had full faith in Dugan and that Dugan made the right call.

No social equity here... seems more like corpora-fascist behavior to me... with our tax money to boot.

Sheila from FDIC, spoke, in her incredible professional monotone, of her plan (already up and running) that renegotiates loans and allows some distressed homeowners to stay in their home. Politicians were impressed with her scheme. i believe she said 60% of those who applied met the initial requirements for consideration. Also mentioned was an anticipated recidivism rate of 30% (second failure to perform) on renegotiated loans. She's seeking $25 billion for the program and possibly a job with the new administration.

Took a bite out of some Brunswick

Vinod!! You strike AGAIN!! Nice call....Now whats the sell point? :)

Grym.. I am looking at the rotation from the perspective of a shearing alley. In other words, who still has some wool to be sheared. The bears were robbed by the Treasury and SEC shenanigans. Then King Henry robbed the bulls when he crashed Lehman. So who is left? I see the market as an abbatoir now, and who is being herded where? Correct, the seekers of safety into Treasuries and the buck.

ignored vadym's trading principle and averaged down to 1.44 on my RIMM puts. this is a moonshot into the close.

OK, now that I have turned the market around, I decided to use 1/2 of the money received from my VLO sale to buy SLW (2000 shares), which I think will double before VLO does.

Astral.. I was astounded as well. The Congressman could only extract a muttering stutter to look over the deal. This is beyond description now.

Here we come, walkin'
Down the street.
We get the funniest looks from
Ev'ry one we meet.
Hey, hey, we're the Monkees
And people say we monkey around.
But we're too busy singing
To put anybody down.

We go wherever we want to,
do what we like to do
We don't have time to get restless,
There's always something new.
Hey, hey, we're the Monkees
And people say we monkey around.
But we're too busy singing
To put anybody down.

We're just tryin' to be friendly,
Come and watch us sing and play,
We're the young gneration,
And we've got something to say.

Any time, Or anywhere,
Just look over your shoulder
Guess who'll be standing there

Hey, hey, we're the Monkees
And people say we monkey around.
But we're too busy singing
To put anybody down.

(break)

Hey, hey, we're the Monkees
And people say we monkey around.
But we're too busy singing
To put anybody down.

We're just tryin' to be friendly,
Come and watch us sing and play,
We're the young gneration,
And we've got something to say.

Hey, hey, we're the Monkees
Hey, hey, we're the Monkees

GRAB THE SADDLEHORN. SHE WANTS TO BUCK.

repost...

we need the monkey!

http://tinyurl.com/54uux6

volume up enjoy the rally.

does anyone think that we are going to see dow above 9000 again anytime soon?

By the way, Davey Jones is no longer a monkee - he's a guerrilla - a guerrilla trader. (thanks for spell check)

hey look - green arrows

so is this market telling us that the only relevant part of the day is the first and last 15 minutes of trading?

Where is the 'monkey'???

given the way that my portfolio has gone in the past 6 months, clearly I am the monkey

Turnaround Tuesday earns its moniker... now will it stick? There is no such thing as a quadruple bottom. Based on a closing basis this seems to be a third test.

Why buy BC now? - for a quick trade, maybe, But isn't it (longer term) toast unless it gets a bailout? Doesn't that make it like playing the lottery at least until there's a significant chance of bailout? What am I missing?

Newbee,

If you can't watch everyday, I think you have a couple choices.

1)Adjust your timeframes to month/week/day a la Elder. Using a 26 month EMA, you'd trade in that direction which is down. Using 50/200 week EMA, you'd wait for a rally to 11,500 on the DJIA for and short it. The daily chart would show the day the HOD is rejected.

2)Go with an asset allocation setup. I've been looking at VT for a worldwide stock ETF, BND for all bonds, and GSP for commodities. Buy those that are closest to RSI Triple Buy. At this point, GSP is in a Buy Alert. Won't be a perfect entry. If it drops, say 10%, buy more. Rebalance annually.

JMO.

Bill,

You commented yesterday that the current environment is especially difficult for long term investors. That is only true if the long term buyer is trying to purchase at the best possible price (i.e. the 'bottom').

Another way to look at it is that any purchases made now for the long term are at prices well below the historical norms (based on normalized earnings over longer time horizons - not the trailing or forward 1 year stats that the financial press focuses on).

As long as I can pick companies that survive the downturn, I will be rewarded at some point. A day trader on the other hand has to wake up every morning and beat the odds.

[Bill Cara note:

Agreed. I was referring to patience. Most long-term oriented traders have been pushed into thinking short-term, and this is a difficult time for them.]

moab - i don't even know if we can distinguish these tests anymore. i mean, it hit 839 on 11/10, then just above it on 10/27, then slightly below it last week, then right around it today. technically that's a quad bottom.

I don't know enough about technicals, but i thought there was no such thing as triple bottoms, generally speaking.

One piece of evidence that talking heads are on "bear overload":

I have yet to see an article or news story on how lower commodity prices will help to support/stabilize the economy. None whatsoever. I even saw an article headine on yahoo finance titled "Why investors shouldn't buy commodities".

Where were these jokers when oil was $140 a barrel?

I think right now it is wise to look at what industries will benefit from low priced commodities once conditions stabilize. It may not be immediately evident in rising stock prices, but a lot of industries will be able to execute long-term business strategies for a change (as opposed to chasing violent commodity fluctuations of the last few years).

Some ideas:

Airlines (fewer competitors, cheaper fuel)

Utilities (cheaper fuels, stable cash flows)

Air Freight (UPS & FedEx under much less fuel pressures)

Oil Refiners (supply/demand should stabilize as low prices help clear inventory)

Risk management the last couple of days: Got off a couple of "average down" trades in more risky stocks that I made in the last weeks without a loss. Bought CNQ.to at $46 (averaging down). Will place sell order for these at $48. Bought small position SOL @ $3.10. Sold TBT at $59.6 to do so.(The market can remain irrational longer than I can stay solvent on this one.} Maybe it will come back to me in the low $50's as someone suggested. Holding G, NOT, TCK.B DFE, and AGU.

full disclosure: own GSP/VT, no BND.

yvrapx - Looking on the other side of the coin: Do you believe corporate farming is less efficient than family-style farming? Where would US farming be today if there were no subsidy? Genetic engineering also? Should alternative energy not receive future subsidy?

I think government subsidization is capable of benefit when not influenced by poor judgment (self-serving lobbyists). Regulators need to have their feet held to the fire by the people, the people must demand regulatory respect for the process. Expectation must be set prior to simply throwing money around.

There are many examples of poor uses of subsidization throughout the global environment. Foreign products are subsidized in various ways, some more evil than others. In fact, many of these products are non-essential to the end user. I'm not convinced the farm bill, as originally intended, is a poor example. Arguably, todays bastardized version is.

And perhaps you are correct, society no longer can be trusted to practice self-discipline.

DISCLOSURE:

my long term investment account is fully long as of last thursday...

my short term account is all over the place in an effort to mirror the market and my schizophrenic nature right now. yet while my schizophrenia peaks, my inner trading soul is singing the sounds of silence (http://www.youtube.com/watch?v=9hUy9ePyo6Q).

airlines have been anything but stable despite slide in bbl/oil $147 to current $55+ i.e. they've been traded like any other (CAL was at $6+ back in July, rallied to $20+ and dropped back). even the much-respected LUV has suffered.

what's the fastest way to make a million?

start with a billion and buy an airline.

Interesting that the late day surge in the DOW was accompanied by a rise in the USD. Lately, there has been much divergence between the two. Therefore, either intervention or the unconfirmed start of a new trend.

David - Thank you for chasing away those bears...

CP,

Any time that subsidies or tax policy or public policy changes supply or demand, it causes misallocation of resources and unintended consequences. The ethanol program drove consumer prices thru the roof. Earl Butz under Nixon had farmers planting fence post to fence post including environmentally fragile ground. Then Carter's grain embargo crashed the US grain mkts and caused all customers of the US mkts to make the effort to become self sufficent even tho' most did not have comparative advantage of the US farm land.

US ag policy is a disaster and needs to be cut but politically it is suicide.

teamfuego -

I agree, the landscape technically is extremely muddled, but the S&P on a closing basis has tested this level only three times, including yesterday/today. I'd like to see the short-term downtrend line broken.

These automakers are making me ill.

Junk bonds coming into view. JNK and HYG, JNK has RSI 7 day 18. Probably wait for RSI to capitulate.

Transit infrastructure: It’s just not the autos asking for money, although $2bil is a lot less than $25-$50 Bil for the auto manufacturers.

Transit agency officials from Chicago, New York, Los Angeles, Houston, St. Louis, Sacramento, San Jose, New Jersey and Boston were among those who gathered in Washington to lobby lawmakers.

"The officials warned that 31 of the nation's largest transit systems could face at least $2 billion in payments in the coming months if hundreds of the deals go bad. The fallout could cripple rail and bus systems at a time when ridership is soaring."

http://tinyurl.com/5g7n3l

navid:

5 min timeframe works..if you are looking for divergences...it exists in all time frames....shorter timeframes and a divergence in the direction of the trend has a higher probability of firing sooner.

Throw an ADX in there....you can see when ADX has a low number..prices are compressed and range expansion is likeley..watch for the break and trade in that direction.

Dont be early..and dont average down....BTW...indicators dont make a trader.

Be nimble..be disciplined...and always have stops..none of what i just said is going to matter much...:)...you will find your own way then train yourself to follow it.

Dont justify or blame...the market is a wonderful place to make money ...except for opinionated stubborn people..if so...dont day trade and let the volatiity settle....

traits that are wonderful in life..like hope...can be expensive ..in trading.

IF...THEN ...works better...MArket rules...the rest is justification with more reasons than results...:)

Long and underwater.

Dont know much about TA (I keep a cardboard cutout next to my desk w/some funny pictures on it), but going back to about Sep. 30, Dow looks like a descending triangle. Feel free to tell me why I'm wrong (please).

Gad

Gad42 - pull a 10 year weekly chart of $INDU, you can see that 7700 support line is from '98. If that breaks, it would be trouble

I'm hoping we can hold 8000 (or Bill's 845 on the S&P). But if we get to 7000 and that fails, ~4000 next?

(I mean 7700)

Gad42 - what i was trying to point out was that LT trend could negate the desc triangle in the ST chart.... We just have to wait & see how this formation works out.

EEMTRADER
I posted today that will buy if OEX goes 397 and under.
It did not happen yet. and did not buy anything.Still all cash but one position SLW. Which I brought yesterday at 2.98 and underwater. (6000 share)
I personally do not have good feeling about market. Expect that we might go around 7000 in DOW.

I think October will be a walk in the park compared to if/when GM or any other big-name blue-chips decide to have a "credit event."

"For comparison, there were about $270bn in CDS bets with Lehmans and some $1Tr with GM."

http://tinyurl.com/5s7t6w

January 14 is when GMAC repays $1B worth of bonds.

"Credit Events

Defining ‘financial difficulty’ is more problematic, and indeed has led to several lawsuits already. We don’t usually call it ‘financial difficulty’, by the way. It’s referred to as a ‘credit event’, or a ‘default’. We say a credit default swap contract is ‘triggered’ if a credit event occurs, meaning the Big Bank has to pay up in our example.

There are three broad categories of credit events that are put into the documentation of credit default swap contracts:

Bankruptcy
If a company goes into Chapter 11 (in the US) then that is a clear indicator that the company is in serious financial difficulty and that the bondholders may not get all their money back. This is an obvious thing to have trigger the payment in a CDS contract.
Failure to Pay
If a company fails to make payments it should be making, including coupon payments on the bonds, then this can be documented as a credit event.
Restructuring
This is where a company changes the payment schedules it makes on its bonds, usually with the agreement of the bondholders. It’s usually not to the bondholders advantage when this happens, and hence CDS contracts can be documented to cover this kind of restructuring as a credit event.
Of these, restructuring is the one that has proved the most problematic for the market. There are now four separate standard definitions for restructuring that can be used in CDS contracts."

"Treasury Secretary Henry Paulson says if Congress wants to bail out General Motors and other U.S. automakers, it should appropriate the money. But he told the House Financial Services Committee Tuesday he's not giving carmakers any of the $700 billion from the Troubled Asset Relief Program"

http://tinyurl.com/59rk95

In Australia.

"The Federal Chamber of Automotive Industries estimated the credit hole created by GE and GMAC's departures at $2 billion nationally.

GE and GMAC wrote to dealers more than three weeks ago telling them they had 60 days to come up with alternative financing.

"Sixty days is simply a ridiculous amount of time to try to get new financing in this economic climate," Mr Purchase said. "

http://tinyurl.com/6hhrjl

Shiva,

I think I understand (hopefully we turn upward and destroy the triangle). It seems like you can adjust a TA time frame to find numerous patterns, and some of it's not too useful.

If auto maker do not go Bankrupt, here is a stock that may double-SIRI

[Bill Cara note:

What this meeting of the Big 3 vehicle manufacturers can lead to is a long-term agreement that meets everybody's needs. Ultimately, I think Congress should and will give them the $$$, but make them spend it on electric hybrids. Part of the $$$ could be put by govt directly into a tax rebate on new hybrid car purchases. Fleet purchases of hybrids could be given 100% depreciation -- for say two or three years. I think Obama's Administration should and probably will spend the $$$ on infrastructure that will put electric power stations along the highways across the country. This fits with the need to eliminate the country's dependency on foreign oil plus the need to hire architects, planners, developers, and construction companies because it will take a couple years to work off the excess inventory. The result would be cleaner air, which would have a payback in lower health costs, etc. Also, GE shouldn't get a $ of govt aid unless they negotiate a low cost contract to build windpower plants that feed the highway-located electric "filling" stations.]

wavesmash -
Predicting an automaker's 'credit event' is a most useful exercise. What will trigger the directors of GM to file? Bond defaults isn't enough. But payroll default will prompt the workers to surround the all-glass Ren Cen next week sometime ... hold your cash.

[Bill Cara note:

How many people who watched the Big 3 executives being grilled by the Senators caught this "priceless" moment. Let me set it up for you. How many millions of dollars has Chrysler's Nardelli been making a month? How long did he have to prepare for this meeting? What question was he most likely to hear asked of him after begging for $$billions? A child would know that the question would be "How are you going to repay it?" But when Nardelli was directly asked that most obvious question, he stammered and looked down and then said, (paraphrasing) "We wouldn't be here if we didn't have 100% confidence in our ability to repay?" Pardon me?? What the hell kind of an answer was that!! I'm sorry, but that's just not good enough.]

wavesmash - looks like this is going to be a good example for "chaos theory" for future school students.... This could turn out to be a LT bear market

Here's where CNBC says the tab for the debacle is already up to 4.28 Trillion.

http://www.cnbc.com/id/27719011

Thought the gold and silver loonies would like this:

http://www.nypost.com/seven/11182008/business/governments_cant_handle_global_run_on_go_139306.htm

Bill - I couldn't agree more about Nardelli's response. How does he not know they would ask that? Unbelievable. What's wrong with this picture? It's almost as if he never had to answer this question to the banks that would provide loans to him over time...

[Bill Cara note:

I am stunned. Moreover, and I have been saying this for years, you all can see that these people, including the Paulsons, put their pants on same as you and me. I have met these people (or people at that level) and they are nothing super special. Yes, they are talented and typically intelligent, but so are millions of people like them. They have risen to their levels because of their accomplishments at boardroom politics. They control their environment, which is their executive managers and Board of Directors. Otherwise you would never see an employee, which is what they are, making tens of millions of dollars annually plus incredible perks to do the job they do. I don't believe in govt controls over compensation, but I do think that a CEO's power base has to be removed so that compensation would be effectively approved by all the stakeholders. Some of these CEO's are losers and should never get the pay packages they do. The next Administration should appoint a Task Force to report facts and recommendations to Congress.]

Maybe they should explore this guy's idea. He used to be a top gun working for SAP AG, now promoting electric cars.

http://www.betterplace.com/

http://www.iht.com/articles/2008/01/21/business/cars.php?page=1

Citigroup‟s Hans Kullberg (“Reconstructing America: Why the US Government should turn a blind eye to US automakers.. and invest in the future”) has written an interesting piece in which he details the extent of the problems facing the US auto sector, but also puts forward a strategic alternative simply to shovelling money at them (in the form of investing into energy and alternative energy infrastructure):
“Every time I see a commercial on television advertising a “0% APR No-Fees, No-Money Down” loan for a car, I cringe. The average American household currently owns 2.28 cars – how many of these are idle ? The days of “buy now and pay later” are over, meaning there‟s no money left to buy cars, meaning there‟s no money left to support the auto industry, meaning there‟s no sales revenues to pay absurd pension plans, meaning there‟s no reason for the US Government to extend a lifeline simply to postpone the inevitable future of a futile auto industry. Although politically appeasing, to do so would be a disservice to the American taxpayer, which is a much larger contingent than the 2 million or so odd jobs that would be saved. It‟s readily apparent the “modest” loan would be used simply to renegotiate debt terms which are now trading at 25 cents on the dollar and yielding over 30% a year. To put off the day of reckoning will make the downfall worse when it finally comes.”

Part of an article in the UK by Tim Price of PFP.

“Nothing is easier than spending the public money. It does not appear to belong to anybody.”
- Calvin Coolidge.

But then, let he who doesn‟t need government money cast the first stone. And the problem with government money is that in most jurisdictions the very term is a misnomer, because governments too are already heavily indebted, so it‟s taxpayers’ money we‟re really talking about. And this gets us to the heart of the debate: at what tipping point do effectively unlimited guarantees and capital support by governments start to become self-defeating, inasmuch as they start to erode belief in the very instruments (specifically, government bonds, and in due course fiat currency) from which they are constructed ? Or to put it another way, when does money start to eat itself ?

It seems to be doing so already. As economist Willem Buiter points out, credit default swap spreads (the price of insuring against a default) have risen for the most seemingly credit-worthy sovereign entities, including the UK (5 year sovereign CDS at 0.46%), the US (0.33%) and Germany (0.27%), well above their post-war historical averages. Bloomberg reported that credit-default swaps on US Treasuries have risen by nearly 40% since TARP was signed into law in early October, “and are now about the same as Mexican and Thai government debt before the credit markets began to seize up in June 2007.”

re:chart patterns.

I see a ST symmetrical triangle with 9500 resistance and 8100 support. More disconcerting is a LT descending resistance trendline from August, 2007, 10,200 resistance today.

If you owe $50,000 to the bank it's your problem.

If you owe $1,000,000 to the bank it's their problem.

If you owe $32.45 billion to all the banks it's the taxpayer's problem.

"The federal government is working hard to minimize systemic risk, so it seems logical that they will make every effort to restructure GM and GMAC without triggering the CDS contracts at either company,"

http://tinyurl.com/67kxph

There is no hope of repaying $32.45 billion. Why aren't the oil companies coming to the rescue of the auto industry?

XOM made $14 billion profit last quarter.

If the Gov't decides to bail out GM (I hope they do since I hold a small position and I'm from GM country) I think they should also send a couple hundred million to Tesla motors and some alternative car companies too.

Share the debt.

Re AAPL. I've been been paper trading or scalp trading this stock daily since $35 and thought I would share some stuff I've seen.

Firstly the move from $35 to $90 was Ipod and $90 to $200 was Iphone and Mac sales increase. Also a new group of speculators joined the crowd for this second leg up. It has now traded back to $90 removing Iphone and Mac from the equation.

My personal take is that the stock is currently oversold but it's price is on hold pending a new broad market direction, and some clarity on the impact the global recession and smart phone competition will have on demand for their expensive products. That would be my guess.

RE; Big 3 automaker CEO testimony

Caught a bit of this on CNBC this evening (assume it was a replay).

Several thoughts ...

Again, like the financial industry, do taxpayers reward bad behavior by giving them bailouts ?

When the CEOs were asked if they would exceed fuel efficiency standards, they replied that they would work hard to meet them (not exceed them).

When they were asked if they would do as lee Iacocca did back when Chrysler was bailed out and accept a $1 salary, Nardelli said yes but one of them said (paraphrased) "he would share in the loss", the intent meaning he would take less but would require A LOT more than $1. Nonsense !

Will have more thoughts later as I must take my significant other out for an anniversary celebration !

Congrats on the anniversary ToddinFL, that's something to celebrate!

"..you all can see that these people, including the Paulsons, put their pants on same as you and me. I have met these people (or people at that level) and they are nothing super special. Yes, they are talented and typically intelligent, but so are millions of people like them.."

my parents enjoyed entertaining during the period my Dad taught at Michigan...on any given week, they might host lunch or dinner for assorted guests who were either visiting or had been invited to Ann Arbor (as our home was within walking distance of the main campus)...an occasional 'dignitary' would grace our home, sometimes accompanied by a spouse and children...my observations were that (in general) the higher the position, the more unpretentious the guest; all of them were down to earth...one of my favorites was wilbur cohen (and his wife eloise)- he would drop by on a warm summer evening in T-shirt and shorts and be funny as hell...

but that was a different generation...the arrogance I see in the government these days is quite a contrast...i guess genius can erode with each succeeding generation of politicians as well...in any case, I have high hopes for Obama...

Norm,

Ah, yes. I have a very good friend whose son in law is a super green, anti capitalism type politically, but jumped at the chance to buy the biggest SUV available due to the write-off he could get.

The 2004 American Jobs Creation Act — whole thing was a farce. Basically it was a salve to a EU complaint of US supports for prices which hurt their markets. We dropped the supports and then to make US business feel good, let them bring home earnings on foreign operations at a lower tax rate. No jobs were required to be created in the US.

I watched a little of the auto bailout begging session today. A professor from Maryland and Senator Richard Shelby had the only comments of reason. Basically saying no matter how good these CEOs manage their business plan is fatally flawed. They make too many of a product which requires fewer workers every year and must spend $105,000 per each employee they wish to drop. Their retiree costs are an albatross they are stuck with and foreign competitors can run rings around them.

yvrapx,

My family background is mixed on the idea of unions. My father's father and his three uncles were a coal miner before the unions and endured terrible conditions. My mother's father commanded a National Guard infantry company called on to put down coal strikes in which a number of miners were killed.

For most of my working days the unions were nothing but trouble. I had a grievance filed against me for carrying a box (using both hands) to the shipping dept. in order to meet a deadline while the union trucker sat on his butt (break time, you see).

But... somewhere during the 1980s things began to shift to where management got too powerful. They are the ones IMO who drove the jobs out of the country. The bottom line took a big upward jump with each cut in employees here, the stock options spiked in their favor and the board (their golfing buddies at the country club) gave them big bonuses.

Calvino,

Henry Paulson makes me uneasy to be half Swedish. He was so much involved in the setting up and benefitting of the derivatives it is criminal and now he's playing God with taxpayer dollars. Still I think it remains to be seen if he and his buddy Ben will be able to avoid driving us into a deflationary depression.

The whole thing certainly smells like sheep an I don't mean the woolly part.
-----------

CP,

I think subsidies as emergency, temporary measures are OK and at times a necessity, but not long ago I read we were still subsidizing bee keepers. It seems we needed bees wax in manufacturing certain ammunition in WW2.

Our city has busses capable of carrying 60 people and seldom are there more than a few riders — because the federal subsidy only applies to buses of that six. A minivan would do the job.

--------

Bill,

The board room politics I observed included serving on each others boards of directors and compensation committees. In other words corporate incest. Five companies for whom I designed annual reports include at lest three members in common. One guy got a six figure bonus in a years the company earnings were down 23.75%. nowadays that seems like peanuts with the CEOs involved in the mortgage mess.

Lee Iacocca; Robert Nardelli...man, what a difference a generation makes...

It seems those who held CDS's on Lehman were prepared a very nice short.

Oil companies would obviously rather the government bail out automakers. Probably they are working on their own plans in the background?

I'm sure we're not getting the entire story on any of the current events.

From our discussions concerning subsidies, I conclude the desire here is to continue a fossil-fuel based economy. That is, unless someone has a suggestion of how a paradigm change could occur without. I can think of numerous technologies where subsidies could be beneficial, in general, I'm suggesting let's carefully consider the future goals of this country and how we propose to achieve them.

The farming subsidies to which I have been referring have their roots in the great depression and the long forgotten dust bowl. From these subsidies, the US has developed a plethora of agricultural technologies, not the least of which has dramatically improved crop yield.

I'm not all too hot on the idea of subsidies in general, but in certain cases, I hope you can agree, they are a necessary evil. One of the greatest problems of course, is they have a nasty habit of taking on a life of their own. This, I believe, is the phenomenon we are referring to, and perhaps discounting the good actually accomplished?

Regarding the pants on the same way: After I graduated from college, I went to Europe to spend some time with a relative who was a senior "government" employee. I got to meet senior diplomats and senior officials from the same services from other countries. I must first confess myself as an arrogant, obnoxious founding member of DENSA. Having said, after an extended period of meeting these people, I remarked to my relative how scary it was that these people were of senior rank providing "services" to our side while the Iron Curtain was still standing.

I heard today's late day rally was attributed to computer-triggered buying. What typically does this indicate for follow-up direction?

Pookster:

The futures are down. Sturm Ruger's reporting...I bet it was a good quarter.

here u go, Bill. Watch your hockey games from the Bahamas.

http://www.newegg.com/Product/Product.aspx?Item=N82E16882082008&cm_sp=DailyDeal-_-82-082-008-_-Homepage

I think there is easy money to be made in low risk, very high quality tech stocks such as MSFT, INTC and AMAT at present prices. Traders or not.

I own the last two at a loss and have made up for some of that with two day trades of MSFT in the last two days.

Did you know that AMAT is a solar energy company because of its entry into panel manufacturing?

CP, perhaps you can provide some specific examples of how subsidies are beneficial - i.e. where the free market would not have produced those benefits anyway. My take is that its generally the "well to do" and well connected that derive the benefits (together with the self perpetuating bureaucracy that develops around these "essential" programs). I realize that sometimes people need help, but in those cases I think the help is better targeted at people who can show need rather than simple membership of a "group".

I bought gasoline this evening for $1.66 9/10. How crazy is that?

Illini - AMAT is an equipment manufacturer, one step upstream of panel manufacturing. They make equipment which is capable of depositing thin films on various substrates, most likely of which for PV application I suppose would be Physical Vapor Deposition.

Crazy. I'm gettin' shafted out here still, paying about 2.50 and the station owners think we're too dumb to realize the gallon-price ought to be down say ....well right around where you paid or a few cents higher.

They're making a lot of extra money on the way down.

I said staion owner but I get that they're in a sqeeze, mostly it's the oil cartel.

CP said: "I heard today's late day rally was attributed to computer-triggered buying. What typically does this indicate for follow-up direction?"

Maybe the same follow-up to the action of last Thursday? That hellacious 3 hour bounce-rally off the break/test of the Oct. 27 low was followed by an open at the closing price, profit-taking until midday, a rally and rejection at the day's high followed by a collapse back down to the 826 (S&P) today. Only difference is that today's closing rally was decidedly weaker. Methinks all this "Auto Failure" talk, corporate bond action, and CDS spiking is not signalling pretty stuff in the short term, but who knows? Today's close left us sitting right at the bottom for a fourth time. The next day or two should make things clearer.

On the other hand , I see that the T-Bills yield rallied an impressive 22% today. That must mean something?

Here in the land of corn the price of gas just recently fell below $2. That includes Illinois state sales tax at the pump. In Missouri, it is less because of no tax.

I am not a happy camper because of owning MRO and COP. Looks like Cara 100 XOM would have been better but not good. All pay divs and may be hugely undervalued. Thats my style for a buy. I do not benefit much from lower gasoline prices due to minimal driving now and always being efficient thru Japanese engineering.

CP -"I bought gasoline this evening for $1.66 9/10. How crazy is that?"

I put 30 gallons of diesel in my truck on Sunday on my getgo (Giant Eagle) "fuel perks" and the pump showed $0.0. 30 gal is the limit and then you reset. I know it's not really free and maybe they could just discount the food I buy, but that would have cost me $130 or so just a couple months ago. BTW, they just introduced a new food discount program based on how many gallons of fuel you buy, even if it was under their fuel perks program. I'll keep shopping there.

Please don't fret about the price of crude being so low, our friends(not) dressed as pirates will soon cause great distress in the market!

MOGADISHU, SOMALIA– Pirates who seized a Saudi supertanker loaded with two million barrels of crude oil anchored the ship within sight of impoverished Somali fishing villages today, while other bandits took control of an Iranian cargo ship – the seventh vessel hijacked in 12 days.

Brian

How in the world do a bunch of Somali Pirates manage to get a supertanker to stop, let alone scale the vast ship to board it?

grappling hooks and it doesn't have to stop as I understand it

what I wonder is why can't they arm those crews. I'm sure somebody sees those little boats coming. Well, if they are doing their jobs anyway.

cyderman - Subsidies - Briefely, concerning farming subsidies, I think Americans would be paying much more than 10% of their income on food without the technological advances made possible by subsidies. I thought I had explained, but perhaps not well enough to make my point. In the grocery this evening, I noticed much higher prices for some of my favorite produce (fruit) than other lesser desirable but equally essential foods. This, IMO is because fruit growers don't receive subsidies. The revelation I took home with me was that if fruit had as much or equal emphasis in terms of subsidies, or perhaps less for other categories, more of my favorite food would be available, with perhaps greater variety. My conclusion was either the lesser desirable food had unfair advantage, or the free market prefers to deliver based solely on profit. Then I wondered how much farmland the free market would reserve for food production, each category of food production, etc. vs other uses such as shopping malls.

Well, I suppose one could say there'd be just as much land devoted to food production at this point in time if subsidies didn't exist. I wouldn't be willing to say that, myself.

Man evolves externally almost exclusively. Much faster, in my view, than internally. External evolution requires advancement in technology. Advancement in technology, if it came solely from a free market, would be based primarily on profit potential, with larger amounts of free market capital being devoted to areas where the potential for profit is maximized. It is for this reason, when technologies are infantile, that the free market doesn't necessarily guarantee, in my view, rapid advancement of technology. Thinking hypothetically, if I were to inquire to an investment group with a design thesis for constructing a time machine, but were not able to produce an actual working model because of the tremendous expense involved with construction, how many free-market investors might I hope to attract?

I think this is also true to a large degree, for agricultural technology and applicable to a strategy for ensuring a strategy for feeding the masses and avoiding hunger. It's a form of national defense, I suppose.

In the effort of avoiding typing into the wee hours of the night and clogging the blog, I've attached the following, which explains the history and intent of the farm bill in great detail:

http://www.aei.org/docLib/20070515_sumnerRationalesfinal.pdf

Regardless, perhaps it would be most useful to look into the future... Do you agree the free market has yet to deliver a competitive edge for renewable energy on grand scale and that one is urgently needed? Is this because fossil fuels are currently subsidized? My position is alternatives will require immense investment following a catalyst. I'm anticipating some kind of subsidy will be required as a catalyst, to tip the scale, allowing a paradigm shift to occur. The fossil fuel subsidy, if there is one (I have yet to confirm), could possibly be diverted to the task.

I just banged this out quickly and trust my train of thought isn't too difficult to follow...

You are looking at your feet, try looking beyond, do you actually think it would be possible to board a super tanker with the deck 70 feet above of the water with ropes and hooks, Me thinks the bad guy's were sleeping below the decks until needed.unless it was "Spiderman"
Skylane

Pirates - I actually saw video from the ship(supposedly) showing the pirates boarding via grappling hooks, etc. while the ship was under way. There have been some 90+ ships hyjacked this way, apparently in the last year, and 60 some since Jan 08.

Henry Hazlitt authored a book titled Economics in One Lesson. It's actually available on line for free if you Google it. In his book he highlights the consequences of bad policy, primarily a lack of consideration for the long term effects vs. the short term and the implementation of policies that benefit one group vs. all groups. Over the decades subsidies have proved to be inefficient in the long term and simply rob Peter to pay Paul. Just look at the EU agricultural policy where farmers are paid to destroy crops, and so on.

Whenever I hear subsidy I hear distorted markets through inefficiency and ineffectiveness resulting in an ultimate advantage to lowest cost producers elsewhere.

I commend Hazlitt's book, its easy reading and like a good hammer it hits nails on the head.

skylane I'm just saying what I'm reading. I haven't seen video but yeah, I wouldn't try it as much as I admire spiderman. Nutjobs if you ask me, but seriously those guys hauling 100mil in oil would do well to hire a well hidden retired army sniper for the journey.

CP - too long for me to read the whole thing now, but from the intro:
"It is hard to explain such payments as helping needy farmers when most of the payments go to the larger and more successful farms and when farm households have higher incomes and far higher wealth than nonfarm households. Furthermore, there is clear evidence that U.S. agricultural production would be only slightly reduced by eliminating the programs, with some shift from the 30 percent of agriculture that gets most of the support toward those enterprises that are largely unsubsidized."
Based on your past postings here, I rather doubt that you need subsidies for your fruit purchase. Shop around, buy organic if you're concerned with quality over appearance, buy local.
Alternative energies will succeed when the price is right - but there are subsidies to fossil fuels if you consider that pollution is effectively a subsidy - the car pollutes the air with its engine, not just the owner's air, but everyone's - we accept it because we all (well almost) drive. The person pays the subsidy in the form of lung disease (and not too long ago, in lead poisoning).
I still don't see any difference between subsidies for GM and subsidies for farmers - all money misallocated.

CP,

Here is a big clue on oil subsidies, although I dont know what happened to the bill:

http://tinyurl.com/6s9mhp ... NY Times last year.

For many years there was also an "oil depletion allowance". Similarly, nuclear has a long history of gov support which is on an uptrend as we speak.

I have to agree with Cyderman on the farm subsidies thing. My degree is in Ag from one of the 12 land grant schools. My professors pretty much burned it into my head how bad subsidies were/are for the family farm (who they really really wanted to see succeed), very ineffective for the taxpayer and only really beneficial to the large corporate farm (unfortunately our vastly current majority in the ag world). But Corporate farms aren't the ones that innovate. They'll just adopt ideas (and taxpayer money) That's not to say that they won't pass on their savings to a consumer however to be competitive.

But the innovation though comes from the universities in my opinion and the universities help all the ag people, corporate or otherwise. They really study it and come up with the best ideas. The technology gets spread around. Just my opinion though. Do your own research.

gdiman,

Your profs may have had their heads in the right place but have not been successful in keeping the large corporations from taking over and benefiting the most. Agribizness is big bizness and they control Congress.

this explains the price movement in SRS:

http://www.reuters.com/article/marketsNews/idUSN1826572220081118

Anyone see the CMBX AAA spreads? wow. they're up like 400% since July

ALOHA !!

teamonfuego ... What a shock JP MORGAN is in the mix! Where isn't JP MORGAN these days? They're not here at my orchid farm, but they seem to be every where else in the World!

Hey ... where's my subsidy?

ALOHA !!

Okay this William F Buckley on CEO compensation. What has changed ten years ago? What will change in the next ten years? One word ... NOTHING! The only way to make these bankers and politicians honest is to let their power collapse. Their power is the monetary system we now have.

This is from William F Buckley and his disdain for high paid CEOs who essentially are non-performers. What would he say today if he were still alive?

From Cunning Realist:
In 2005, Buckley wrote ...

Every ten years I quote the same adage from the late Austrian analyst Willi Schlamm, and I hope that ten years from now someone will remember to quote it in my memory. It goes, "The trouble with socialism is socialism. The trouble with capitalism is capitalists." ...

What dismays is the utter lack of class in such businesses and businessmen here parading their skills in distortion. Michael Eisner appears twice in the table of the 25 largest compensation packages paid in a single year. In 1993 he took home $203 million. In 1998, $575.6 million.

That money was taken, directly, from company shareholders. But the loss, viewed on a larger scale, is a loss to the community of people who believe in the capitalist free-market system. Because extortions of that size tell us, really, that the market system is not working — in respect of executive remuneration. What is going on is phony. It is shoddy, it is contemptible, and it is philosophically blasphemous. END

Sound familiar?

ALOHA !!

Lets look at some employment figures just to show you what sectors provide the most jobs. A hint ... its not banks and its not GM and F ... Its not the US government either.

- Finance, Insurance, Real Estate = 8mil jobs
- Construction = 7mil jobs
- Trade, Transport, Utilities = 27mil jobs
- Retail = 15mil jobs
- Wholesale trade = 6mil jobs
- Goods producing = 22mil jobs
- Durable goods = 5mil jobs
- Service = 118mil jobs
- Professional service = 17mil jobs
- Leisure and Hospitality = 4mil jobs
- Mining = 800,000 jobs
- Education and Health services = 19mil jobs
- Private sector - 118mil jobs
- Government = 23mil jobs

By far SERVICE and PRIVATE SECTOR jobs account for most jobs in the USA with a combined total of 236mil jobs.

How many of these jobs are generated either by US government contracts or US government regulations and laws?

Small business has always been the backbone of the US economy, not GM and not MERRILL LYNCH. It is obvious that the huge businesses getting the BAILOUTS today will never be competitive or self-sustaining. These are the same businesses that ask for BAILOUTS every economic down cycle or crisis. We need to let them fail. If we allow Americans to be free and innovate then there will always be another MSFT in the wings, but if we stifle competition and favor only large inept companies to survive then we will never get past continuous BAILOUT MODE!

Look where MSFT was in 1978 ...

Link: http://tinyurl.com/2ka5vx

Can you spot Bill Gates in the photo?

When you compare "real wealth innovators" like Bill Gates to those who perpetuate fraud and can only innovate tremendous salaries like Hank Paulson it is plain to see who is the more valuable CEO and who provides the more valuable service and product to the masses. Goldman Sachs, like the US government, produces no "real wealth" and they produce no product that benefits the masses. Goldman Sachs like the US government steals wealth from people that produce "real wealth". This is happening right on national TV. Every time you see Hank Paulson and Ben Bernanke speak on TV they are trying to convince you that they have value. They are selling BIG GOVERNMENT, CORRUPT MONEY and WALL STREET FRAUD ... That is the only service they produce. They do not have VALUE! Why do we need GOLDMAN SACHS? The same goes for the US FED. Why do we need the US FED? Come up with a good reason why they should exist ... can you? I cannot ...

QUESTION AUTHORITY!

A 40 minute interview by Charlie Rose of Charles Maxwell and Dan Yergin. If you have an interest in the oil market have a listen.

http://www.charlierose.com/view/interview/9547

Pirates are seizing the ships from important shipping line. When soviet was one of the super power and USA was dominating power of world. And we still are. We never heard pirates seized a ship.
If we do not monitor and petrol world shipping line, if we are weak and tied up in other conflict. Bandit will run wild around the world. Our well being is in stable and peaceful world. If we cannot maintain this we are in trouble?

kaimu,
The employment numbers you quote add to 390mn which I believe is more than the total population of the US so I would think that some of the numbers quoted are duplicated or have you had an invasion of southerners or worse aussies? I would think that the service and private sector are represented in many of the other numbers. An Orchid farmer, I'm impressed.

on capital hill paulson said--- from WSJ
the Treasury feels that the reason it can’t use the funds in the manner Congress intended is because it believes the banks would act in an unscrupulous manner in order to subvert the intentions of the United States government at a time when the economy is facing its worst crisis since the Great Depression?

If this is correct than is a terrible indictment on our society and out of all the things which have gone wrong since the crisis started in the summer of 2007, this has to rank as one of the worst. Is there no end to the greed?

pirate history.

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

On pirate activity:

If you're a crewmember on a boat, your job is not fighting. History is it's purely a business. Why put your life on the line for your relatively puny salary when the company will pay.

Also, these guys are fairly well armed. Getting your hands on armor piercing ammunition or anti-tank weaponry is not all that difficult-a tanker on fire is probably not a good thing.

Bill's 11/19 post is available.