Nov. 20 (Bloomberg) -- The U.S. may need to spend another $1.2 trillion to recapitalize the eight largest financial institutions and stabilize the markets because private investors won't take the risk, an FBR Capital Markets analyst said.

``The sheer size of the capital deficiency, coupled with the opaque nature of credit risk, will keep private capital sidelined,'' Paul Miller said in a research note yesterday.

http://tinyurl.com/6caukt

Today is option expiry day, I think we will see some wild action. Stocks are up in the pre-market, with oil above $50 and gold at $757.

wouldn't this cause some concern to the American politically? are they going to let this happen? I know foreigners are major holders of many US big names, but this takeover seems to be receiving too much publicity to let unnoticed.

Prince Alwaleed Bin Talal is taking more of a beating than Warren Buffett.

http://tinyurl.com/6gwzq9

With dollar index down today I think we are going to see equity market going higher, as well as gold (being up over $20 now).

I'm rising my coffee mug and toasting to an up day in the market...

How can you not be psyched for a day like this?

If you are afraid, dollar for dollar short something and long something.

Like long GG, short some REIT

Even if we lose all 7500 points the above trade will make you money cause the reit will drop faster than the gold will :)

Not to despoil the clambake-but we're awfully sure of ourselves.

re REIT's - when is all the bad news baked in? Is the upcoming commercial storm not anticipated by the herd?

I'm about as sure about an up day as I am my wife is going to come home this afternoon and want to jump my bones....and I'm in the dog house for being a bit moody about our dwindling assets

I've just gotta think that every Tom, Dick and Harry out there who is laughing at the bulls and making sick money in the ultra shorts is setting themselves up for a butt whippin'...it's like being long tech during the bubble IMO

SLW downgraded again...time to buy.

So sad.

It's the drop in the Citi share price that causes them to have to post up more collateral for other margin calls... Another feedback loop. Doesn't matter anymore that the assets on Citi's balance sheet may or may not recover and be profitable again in a few years - the barbarians at the gate want their money now.

I must admit even though I have been somewhat bullish and expecting a rally, the failure of C has the potential to cause another crash again - even if no stocks I own are related to it. Sigh.

Maybe it's time to short SKF...or look at UYG.

And to be fair Muzie, if there is an announcement of a deal or rescue by Treasury/Fed, sovereign funds or Prince deep pockets, it will rally like a space shuttle launch.

re: REIT - I really only look to fundamentals, for example ALX has a PE of 17, NYC real estate (which I am quite sure is bubblicious), and debt. I haven't looked at this stock deeply so of course due your own diligence. I am using it as an example.

"Baked in", for me, is when the stock has already reached some fair value AND some level of risk/uncertainty is priced in. SO no, I don't think the REITs are all "baked in" :)

Some traders may not be willing to hold over the weekend, especially with the holiday shortened trading next week.

Pressure is mounting for Pres.-elect Obama to name his key staff members, especially Sec. of Treasury.

Stating the abundantly obvious (but still helpful to keep things in focus), we desperately need to see a new group of leaders in Wash. D.C. come together with a cohesive, comprehensive plan to right the ship. The haphazard, hodge-podge approach from Congress, Paulson, Bernanke, etc. to date certainly has not helped to calm the markets.

Until the market stops declining, imo there's no need to rush in and buy across the board. I've seen it mentioned here and elsewhere that when the market ultimately bottoms, that it will leave many behind. That is certainly possible, but I think it could possibly turn out to be a grinding, choppy, stop/start type of advance, once it occurs.

There has been so much damage done, and there's so much overhead supply, that it will take time for the markets to climb back up.

There will be plenty of opportunity to buy back in for the long term once the dust settles.

jmo

Like most everything else, C is up pre-market...and above the $5 threshold

I don't know about the financials, with C being a drag on the sector and all. I am looking at S&p500 recovery right now, which took a major beating and I think is due for a bounce if only for the shorts covering. Long SSO @ 19.80

Craig - shorting SKF would be so contrarian it just might be genius.....

nemo, thanks for peeing in the punchbowl of our clambake. ;)

IMO futures are being manipulated this morning, I would wait for a good retracement to buy IF AT THAT TIME the market is still in rally mode. Like cooking calamar, there are usually 2 good times to buy. First is right at the open when no one has any idea what the price is going to do, but of course this is quite risky and a sale must be effected usually within 5 minutes. The other good time to buy is hours after the open after all the broken hearts and broken bones have been cleared away. I suppose a real genius buys and sells both times.

you guys with the C, SKF, UYG i'm sure you can ride this thing up and down, but buyer be ware, - let's just admit it, it could go to $0 or $10, so it is a casino with better odds and the need for a good trigger finger. there is no model of value with the opaqueness here

shorting skf IF ITS DROPPING could be a damn profitable enterprise...but I don't really have enough money to comfortably get involved in SKF...I need a mini-skf!

You too, Todd. ;)

Toddin,

Good points... it looks like a set up to me. Once he announces his treas sec, we rally till year end (or a day or two). It will give markets something to cheer about and have a feel good story.

It would be nice if tall paul were to be chosen but that is a stretch. Everyone is looking to some kind of leadership until then, the boat is sinking.

navid - agreed...I'm interested in smart people's opinions but staying away from the trades

Sharky:

You mean like a BRKB???

N2son:
I thought directly into the clams would be better.

Todd

Mate, could you change your record.

LOL! Mr. big Risk taker here....I bought a few shares of MSFT premkt. Upgraded by Oppenheimer this AM. Not a Cara 100 so not reported by BH.

Setting stop at yesterday's low.

I am becoming more of a ToddinFL O'file though.
Probably late or early like everything else I do.

Once I get home I do have decent odds of my wife jumping my bones though, although I do have a wide range of available glittering hedge instruments that can be purchased to increase my chances....

LOL

haha

Gentlemen/women - Start your engines.

I agree with the cautious sentiment. Who wouldn't?

In addition to the unfolding Citi drama, Bloomberg is reporting Obama's team is planning a pre-packaged bankruptcy for the auto makers. Obama may also name his Sec of Treasury this weekend or just before Thanksgiving to give the markets time to digest the news.

In any case, common wisdom says no one want to hold long positions over the weekend. Even if they've been purchased at once-in-a-lifetime prices.

Such is the fear.

"And to be fair Muzie, if there is an announcement of a deal or rescue by Treasury/Fed, sovereign funds or Prince deep pockets, it will rally like a space shuttle launch."

That's true. Being short the banks earlier this years and having followed them quite a bit, once bank stocks get at these levels they've never recovered.

I think all the rumor-mongering about a PPT holding up the markets should die now. Right now, the "PPT" would only need to focus on one stock it needs to save, and it can't even do that. PPT is simply the madness of crowds.

Luggie:

That's what it feels like. The start of a race. I'm having paranoid delusions

All this talk about bones jumping makes me want to crawl back in bed with my sweetie. The markets can wait ...

Tech sector shows strength after positive HPQ & DELL results.

We're getting off topic. What is the topic?

Agreed. Reading Colin Twiggs yesterday, he had the same take. More or less like the Fed hooking up an IV to a patient with a severed corrodid...the Fed is powerful, no doubt, but no one has enough ammo to overcome the current deflation.

buying a bit of SYK pre market

Gosh... This day will either be epic or the apocalypse it would seem. Opex is always fushy.

Too bad Big Ben didn't have enough rabbit to pull out of his hat right the day before expiration the way he always does.

elliot wave principles for USD.
http://tinyurl.com/5hqbrl

looks like weakness ahead for USD but then...

CNBC starts right at the bell with C panic...

Cara 100 Update (previously noted by nemo):

SLW - Downgraded to Market Perform @ BMO

http://www.bloomberg.com/apps/news?pid=20601109&sid=aNim9TU8RH10&refer=home

If I would have told you a year ago that the best way to be protected in a worldwide credit & real estate collapse was to buy a freakin' SOUP maker, would you have believed me?

Tsunami from bond to equity is coming—watch out

Muzie

It's comfort food, and it has a reasonable shelf life. And despite the general market slaughter, CPB is trading above its 50 DMA and 200 DMA (at least right now it is).

Now it's JPM getting hammered.

Same bat time, same bat channel.

C trading under $5 again

oil under 50 again..

As a testament to Sharky's wisdom...cough...cough...

You could have made 6% buying SKF on the open and selling two minutes ago.

The open was a selling opportunity...very little buying coming in.

GM sucking up to get taxpayer money....they're selling 2 private jets...

Looks like they start with big caps...B is "it" now.

Sharky, always worried about you guys when swimming. Saw an interesting program. Octopi eat you guys. No problem at all.

I don't know Vinod, TBT started nicely but is now giving it back. Not Tsunami-like yet.

Just curious, who here thinks that the 9.1% dividend on GE is safe ?

Trust your paranoia.

Nemo,

I didn't mean short it at the open...I meant generally, with the skf as far from the moving averages as it is, as beaten down as financials were yesterday, as a general guideline, and only when the thing's actually dropping, I am suggesting that skf should be watched as a potential short. When it comes down it will crash hard and tons will be made that way. That's what i meant.

Todd - re: GE, I do....but what I don't understand is why that didn't raise their dividend even half a penny so they could keep their very long record of raising dividends every year, i.e., being a "Dividend Achiever"....that concerns me

GG up 10%

Yep, maybe not this minute, but SKF will retrace...even 50% of the run-up would be a tidy profit.

bought some AMG at 19.27. Both SYK and AMG were capitulation picks. RSI Triple Time frame in accumulation mode and RSI 7 day <10

I understood you sharky...just commenting on your contrarian open call...plus remembering what someone in the industry sai the other day about hedgies looking for a rally into which to sell.

blue bluff

9.1% divvy on a blue chip like GE is just absolutely incredible to me.

It doesn't matter to me if they raised it, just if they can maintain it. The market is saying that the div. is not safe, imo.

What percent age of GE's profits are derived from GE Capital, something like 40%-45% ?

thinking about writing the Dec 10 GE puts....brings in nice cash and if put to me the dividend yield itself is pretty insane and if one were to write the calls after acquiring there are great returns...with this volatility the rolling opportunities are nice as well (of course GE could end up a penny stock although I doubt it because of their diversification)

Everyone knows I'm the king of the undersea world.....Who would you rather not see at the beach more than me?

SOV looking potentially good

I just read that GE is moving from 50% financial to 40% financial and that they have already sold and are not writing any new U.S. residential mortgages....I'm curious about their commercial RE lending exposure though....

"The market is saying that the div. is not safe, imo."

I thought what I heard the market saying was "My hair, my pants, and my crotch are all on fire at the same time, omg please help me!". And not for GE specifically.

Sharky:

Really obese people in speedos

EGO potentially good here

Todd - re: GE - I'm with you man...I walk around my house telling my wife the same thing about that GE dividend....it's historical....of course, she just tells me to unload the dishwasher...haha

bsi87

SYK has been a consistent, remarkable long term performer in the market, as I'm sure you know.

I like and have owned in the past ISRG in that sector. One thing that gives me pause is something that Jim Chanos said a few weeks back on CNBC.

He said that the pressure on the Obama administration to come up with a comprehensive health care plan will potentially put pressure on the health care sector, and he mentioned device makers in particular because of their high profit margins.

Guy who works with me had 110k in his brokerage account.
He lorded up with stock and ETF (no short ETF). And use maximum margin available.
Now his account is worth 25K and got House margin call for 5200. And it shows YTD he is up 24k for IRS purpose.
What we learn from him is as of today he has to pay tax on 24K
To use margin is receipt for disaster, because no one know where market will go.

MSFT: taking profits and standing aside here.

BTW....If you can't really short the financials when you buy SKF what the heck are you actually buying...Seems like a turtle race to me.

I loaded up at eod yesterday on a 1.25X leveraged fund to rising 10yr treasury yields. Doing well so far. Might put that position away "for a while".

Thanks Bill - TOG call!

Dave

"He said that the pressure on the Obama administration to come up with a comprehensive health care plan will potentially put pressure on the health care sector, and he mentioned device makers in particular because of their high profit margins."

Been thinking that for a while. When the government wants to promote a mature sector as a public good, the profit comes out of it unless their are cost plus contracts.

blue bluff

When something seems to good to be true (like that GE div yield), I immediately grab my wallet and back away. lol

But who knows, maybe they'll continue to pay at that rate and it will have turned out to be the buy of a generation.

Citigroup continues it's death-dive into oblivion

looks like GE is heavy into commercial lending...was at a real estate investment group meeting last night and a large commercial player said that after Black Friday many big box retailers are going to pack up and leave the owners holding huge debt service and no anchor tenant

http://usa.gerealestate.com/cms/servlet/cmsview/GERealEstateUSA/prod/en/info_center/About_Us.html

all short etfs higher highs higher lows

oops should have tinyurl'd

C down almost 10% now

"there are"

bought ERX (3x energy), FAS (3x financials), APWR, ABK.

Closing the gap rather swiftly.

Sigh....

Wow. Looks like the big banks may not last the day.

Another 14% down for C!

I covered my FSLR Jan09 70 put for $11.90. It was more of a bottom picking trade than anything (very bad discpline on my part). So I planned to cover it upon further analysis last night. Immediate support is at $80 and resistance is at $100. I entered at $87 last night. It was a bad move since we're in a downtrend in FSLR and $87 is in the middle of a channel. So I covered in the morning gap up rush. Lucky me.

[Bill Cara note:

I did say yesterday this was not a trade I would have made.]

Cara 100 Update (Final):

ADBE - Downgraded to Hold @ Kaufman Bros.

Agreed on commercial RE. There will be carnage in that sector for awhile.

Check out the chart on GGP. Simply unbelievable.

XOM back in the 60's.

C tanking hard, down 20% now

[Bill Cara note:

I opined this morning that if C drops -25% for a third straight day, the DJIA would utterly tank. C cannot drop like that without traders believing that all major banks are going to fail. A Citi collapse would be the final straw that broke the back of the Federal Reserve Bank and FDIC. I am absolutely certain that C is the number one topic at the Fed, Treasury, FDIC, Obama headquarters, and most every fund manager company today.]

nemo how'd you know about shark? GE divy is completely safe..... and I've got some Arizona oceanfront.

My pessimistic side says we won't make up yesterday's loss today. (Where's the good news?)

Speaking of dividends, check out the yield on DDR.

77% ?

pook:

I think we're both paisan.

[Bill Cara note:

There is a lot of time-wasting chat today.]

can u still get stock certificates? i'd like to buy one share of C to frame for my wall as a souvenir of this carnage - wonder if my broker'd go for it?

In at $19.52 for 533 shares of GG on Wednesday and out this morning at $21.46. Thanks Bill!

If Bill is correct about a Citigroup failure causing the DJIA to tank, then we may have to go back and consider the chances that the govt simply closes the markets for awhile to settle things down.

Is this plausible ?

Sorry Bill, Friday...watching paint dry on the charts at the moment.

Todd,

Since u appear to a LT investor, let me walk u thru my trade.

I look thru this RSI screener, usually every morning.

http://rsi-trader.blogspot.com/

I then run the top 10-20 thru Bill/Korvus's RSI screener. I look for the Triple RSI accumulate or buy signal and more recently, the capitulation sign RSI 7 day <10.

I then look at the max pain options and the 50 DEMA to see what the potential upside targets/resistance is. SYK 50 DEMA is 52, max pain for Dec is 60.

The 10 day ATR is 2.60, so a 1.5 day stop is about 4 bucks. Using the old NAIC measurement, SYK is trading at 36 so there's 16 bucks upside (52-36) and 4 bucks downside so a 4:1 risk/reward, making the trade worth taking IMO.

re:Obama/fundies.
It's always hard to gauge how much the "news" is factored into the stock but I've learned over time, that if the news is out there, there's not much edge in trying to trade on it.

GL.

SIGM is trading below cash. They have $7.00 in cash, no debt, and are profitable. They projected $42 Million in revenues for next quarter. Last time they did that much in revenues was 4 quarters ago and they earned .32/share in that quarter.

Pivot Points & Fib calculators;

Great calcs.for setting support and rest.targets.downloaded daily,weekly,monthly quotes into excel.......amazing how close those targets are to actual prices.I have used it several times with a combo of rsi , stoc. and candles....with good results.(Lucky maybe ?) comments from posters using this system appreciated.

http://tinyurl.com/6hfuj4

fuego: CIEN, too.

C RSI capitulation. long at 3.81

SIGH....

Several weeks ago Bill said if C, BAC and JPM do a nose dive then it is time to sell everything.

What is everyone's opinion? Is today the day?

I am long on Bill Cara 100 stocks purchased 2-3 months ago.

[Bill Cara note:

Let's quote me if you are going to paraphrase. Thanks.]

I'm currently tracking four NQ stocks, the Q's and the composite itself and watching this market is like watching a drunk try to get up off the couch. It would be comical if it wasn't so sad.

Chris

bsi - thanks for that breakdown of your tactical buy decision

bsi - yeah, thanks

C is now down 30% from its gap open. And 20% from yesterday's close.

Worst case scenario appears to be unfolding.

Bill, given the uncertainty about C it seems the best course of action for traders is to protect their capital by going to cash. Anything else, particularly a bet on either side of the final outcome, is ... well, just a bet.

bsi87

Thanks for the explanation re: SYK

I know you have a specific methodology and stick to it, and that always serves market participants well.

No stock typically drops in a straight line, and SYK has been down 12 consecutive trading days, so that in itself makes a bounce highly possible.

I mentioned the Chanos/Obama/health care conversation only as a macro back drop to that industry.

Would you look to hold all the way back to $60, or would you take profits earlier ?

There seems to be a fair amount of resistance at $45-$47.

Out of GG @$21.40

VB,

No one here can make that decision for u.

If the End of the World As We Know It is nigh, then the value of your portfolio is probably the least of your worries.

My suggestion to relieve your tension is to throw a virgin into the volcano. That is, select your worst, losing position and sell. To sell willy nilly makes little sense.

And I'd suggest learning more about position size and sell stop limit orders

GL:

Good morning – The 10 year U.S. Treasury bond price is down this morning to raise the yield to ~3.20%, up from yesterday morning's 3.15%, but well above the close yesterday of 3.0%. Yesterday’s drop in the yield was historic with the yield moving down ~.75% from last Friday’s morning fix. Mortgage rates have of course improved, but in comparison to last January; we were locking @ 5.25% (no points) for a 30 year fixed when the 10 year yield stood at ~3.3%, well below today’s mortgage rate(~5.875%), due to Fannie requiring higher rates (yields) to successfully market mortgage backed securities in this market environment. Happy Trading

vanilla, bond yields are inching up slightly and the dollar is topping.

A silver lining in the storm clouds?

"Pivot Points & Fib calculators;

Great calcs.for setting support and rest.targets.downloaded daily,weekly,monthly quotes into excel.......amazing how close those targets are to actual prices.I have used it several times with a combo of rsi , stoc. and candles....with good results.(Lucky maybe ?) comments from posters using this system appreciated.

http://tinyurl.com/6hfuj4"

Who's this guy?

Sorry, meant to say hold all the way to $52 on SYK.

323M shares of C traded already...wow

WFC looking to close the up gap from July 16 ?

Gold today is in backwardation today for the first time since 1999...

This morning, gold officially went into backwardation for the first time since the announcement of the Washington Agreement in 1999, which sent gold shorts scrambling to find physical metal after the world's major central banks agreed to limit sales of gold going forward and ending the one-way trade to the downside in gold that had been in place in the late 1990s.

We know gold is now in backwardation because the gold forward offerred rate (GOFO) has now gone negative. The 3M GOFO has fallen 12 basis points to -0.07%, and the 1M GOFO has fallen 20 basis points to -0.1167%.

Unlike other commodities, gold very rarely goes into backwardation: This only occurs when 1) The market fears a collapse in the currency, and/or 2) The market is worried about counterparties making good on their promise to deliver gold (which was briefly the case in 1999, when the Washington Agreement was announced and shorts were squeezed).

http://tinyurl.com/5klzz9

Hi,

One of my younger colleagues is shorting at these levels on the grounds that, according to him, "this is the worst single event we have witnessed since the market exists, much worse than the Great Depression, and of course that we will probably see DOW 6000 by the end of the month"

Now, when I hear these kinds of comments, I know that the cycle has peaked, and in this case, this is to me yet another buy signal.

Disclosure: I am long equities and remain adding to my longs at this point.

Enjoy your weekend.

Cheers!

WFC: looks like it... i think we're close to True-Semi-Opaque-Balance-Sheet Value (lol), and they are one of the chosen ones so shorting here is going to be tough.

Don't likem though. Buffet all but begged Congress for TARP for his WFC.

re:SYK.

difficult to say. If the rsi 7 day > 70, I'd probably sell at that time, no matter what the price.

Key is move the stop with the price till breakeven

Anyone else take a look at the daily chart on SLW? I'm hesitant to say so, but I see it forming a base.

I've got an order in today in case we get a pullback from the top of the channel. If I get filled that would be good entry with a stop just below the recent low. A good risk/reward, imho.

Nemo.

Who is this guy ?

Dont know,dont care.Did not point to or refer to a guy or person.have no connection to that site or that person.I do use the calculators.Hope some posters can find it useful.

Here's a thought.

The imminent Citibank failure is a problem for the dollar, since the FDIC has guaranteed all those deposits, and now they may actually be called to pony up the cash. Which they don't have. This is somewhat concerning.

We're just a big version of Iceland. A 100% FDIC guarantee is great for confidence, unless and until a monster bank goes down, at which point its time to pay up. Which is not so good for the currency.

This situation would seem to be gold-bullish, and if it weren't for the little issue of the global recession, oil bullish as well.

Gold up big, oil up mildly, buck drops against the euro, at least for now.

I'm hanging on to my GG. I think I'll try using a trailing stop. I want to let my profits run. Sheesh, it's the only thing in the green for me...

Well, i'm off. Everybody knows watching the markets during the day is a waste of time (unless you're daytrading of course) - and some of us still have jobs. Whatever happens in the next six hours will most probably be completely undone in the last 30 minutes anyway.

pardon my retardation but I don't get backwardation...fireworks - care to explain? if not, that's fine, I plan on doing DD

Bill, this morning you wrote, "There is no way that by holding, somewhere between now and maturity, a 5-year US Treasury, that yesterday was yielding 1.937% at the close, will be a loser in your portfolio. You will likely make a +100% gain by shorting the bonds, and another +100% gain by going long gold/goldminers."

Can you please share your thoughts concerning using TBT (Ultrashort 20+ year U.S. Treasury index), and/or PST (Ultrashort 7-10 year U.S. Treasury index) to short the bonds you mentioned?

Thank you,
Learn2Invest

davefairtex said:

"We're just a big version of Iceland."

Oh man, that would not be good. Read this article on Iceland's situation.

http://tinyurl.com/6zy2go

Can anyone explain AET. It's falling apart. It's down $3.34 this morning. frankoo

Use trailing stops and RSI above 70.

Thanks for that bsi87.

I'll let you reap the rewards from that trade. Good luck !

Grym - An interesting article explaining the current situation on TIPS:

"if you believe the yields on US Treasury inflation protected bonds, or Tips, we will have a 2.2 per cent fall in prices in 2009, a 2.5 per cent decline in 2010, and only flat prices in 2011. If that turns out to be true, the real interest rate burden on even the highest rated borrowers will be extremely hard to bear."

http://tinyurl.com/5k4xak

Has anyone found a quality analysis of C's problems? If the CEO did not know how much he needed to get from TARP then I guess it would be easy to infer that JPM would need even more as it had a much larger position in derivatives.

I would prefer not to 'infer' but I'm having a real hard time getting hold of actionable data. My Dad's TOG was to buy Chemical Bank (acquired by Chase then JPM) when it cut its dividend and it's price fell to an all time low in the early 80's (his TOG should have been Coleco Toys which I believe he ran up from 1 to 60 but failed to sell).

If C has the power to bring the market to its knees then why aren't we allowed to know more about its internal state?

C has been insolvent for quite some time now.

http://finviz.com/

the volume so far seems to be huge...

Macro: Can you or anybody else here definatively say that what we are experiencing here won't prove to have been "the worst single event we have witnessed since the market exists, much worse than the Great Depression"? May sound like I'm making a statement but I'm actually wondering.

Chris

either i'm crazy or stupid, but i just put a boatload in FAS.

Recently I've turned to humor to lighten the mood. I've become an avid fan of The Mogambo Guru, who is a die-hard gold-bug.

Here's an excerpt of bullish outlook on PMs to confirm Bill's TOG call, courtesy of Clive Maund: http://www.safehaven.com/article-11884.htm

"What it all boils down to is this - after years of exponentially expanding profligacy based on unbridled expansion of the money supply and debt, the Fiat Money system has run out of track and is disappearing straight over the edge of the cliff. Most politicians and World leaders can't grasp this simple fact, their thought processes are rooted in an era that is now coming to an end - so their futile attempt to return to "business as usual" by means of zero interest rates and unbridled money supply expansion is having no effect - this is because in the same way that you can take a horse to water but you can't make it drink, you can drop interest rates to zero but you can't force people to borrow. The only hope for business leaders now is that aliens from another planet where interest rates are 10% or more land and they can get a carry trade going with them. Apart from that remote prospect we are staring straight down the barrel of a deflationary depression."

just for a quick trade, of course.

Hello, here is another noob question:

What is the best way to check volumes? I can find accumulated volume of the day at any time, but if I want to know volumes in each hour or any timeframe for that matter, what is the best way to get it?

Thanks in advance.

C trading below the magical $5 is definitely creating some panic. I think I read someone posting above should they dump because of the share price collapse of these banks.

My guess is that Bill said that a long time ago. At this level, I think the market has already factored in this event.

I made a chart comparing C to SPY. Even to a green amateur like myself, I noticed C was going to go down when it failed to break $10 back on Monday. Then a confirmation on Wednesday when it was struggling to test $8.50 (I don't think it even got there).

C versus SPY chart: http://tinyurl.com/5newuj

I'm pretty sure the pros have saw this coming miles away. So I think we are a little late to panic just because C is trading below $5.

However, I am not saying we're going to reverse here, because this is just one of the many realities we can still be scared of in this market.

babybear:

If you have realtime charting you can get minute to minute volume on any of the indices

CP,

Wow!

I toyed with the idea of buying TIPS when they first come on the market a few years ago, but they are CPI based, so I didn't buy.

At that time the housing segment (41%) was distorting the inflation to the downside. Now it is distorting it and hiding much of the deflation which we all can see in housing.

This is too much for me to wrap my mind around at the moment (Will I be smarter when I grow up? :-) . Is this distortion what creates this situation? I just don't know.

I had placed several "stink" bids on blue chip consumer oriented stocks. After finding more current EPS estimates, I lowered all of them. I hope to get them dirt cheap, but can't bring myself to hope for the conditions which would make it happen.

Yes that Iceland article is pretty sobering. Clearly our banks aren't as big w.r.t the size of our economy as Iceland's, but the effects on our currency from FDIC having to make good on it's guarantee to Citibank depositors will definitely not be good. And I'm guessing that concern is why gold is spiking today.

I get the sense that ever since Paulson said TARP wasn't going to overpay for the Level 3 assets, the market has been slowly pricing that decision into bank stocks, coming to the realization over time that in fact these institutions really are bankrupt. All the government bailout fuss in September and October confused the market, but now it's zeroing in on what matters: banks have tons of bad loans that aren't getting any better, and Paulson is out of bazooka rounds, Congress is out for the year, "Still President" Bush really just wants to go back to his Texas ranch, and the bad news just keeps on coming.

Will there be a new trick to distract the market? Will the chickens now coming home to roost, be shooed away again by another few hundred billion taxpayer dollars? Based on what I saw with Congress & the automakers, I'm not so sure that's going to happen.

" ... so their futile attempt to return to "business as usual" by means of zero interest rates and unbridled money supply expansion is having no effect ..."

So true. Those who have money to lend are demanding more transparency and provable solvency from the borrower.

Until balance sheets on a personal, corporate, and governmental level are clearly visible, and improve, there will be reluctance for those who have money, to lend it.

At minimum, rates of return will have to rise substantially to justify the risks involved.

jmo

We seem to want to compare this market to others, because it would make it easier to understand, and eventually capitalize on it...but have we ever seen these kinds of conditions in history before?

There is no real comparison to what is going on, which is what is so frustrating.

I want to believe in the TOG, but I don't like to base anything on belief. I think I have learned, however, that making money in any market requires belief. The evidence is never "good enough". Searching for it is eventually futile. It has paralyzed me into sitting in cash, which for now seems to be the best choice (lucky me).

At the very least then, I guess I need a good reason to believe...still searching for it. I am not comfortable with making uncomfortable decisions, yet.

The rally will probably pass me by, but I am OK with that, I think.

Side note, how are people in Iceland doing? Is there a rush for food, gold, ammo, etc.? Anyone have any links to personal accounts of ordinary people in Iceland? Can't really find anything and I would love to know...

Thanks nemo.

Unfortunately I am at work and I can't access real time data .. I wonder if there is another way to get hour by hour volumes.

Thanks again.

Swinging in and out of TNA and TZA today. I feel like a Somali pirate.

CP, Chris,

This morning I bought DGP.

I'm afraid the loss of our manufacturing capacity and the more than doubled population can make it even worse this time. It doesn't need to be so, but we are doing a lot of the same "solving" as was done then.

We (congress with the urging of people like Henry Paulson) threw out all the wisdom we learned the hard way back then.

I believe the banks are not lending because they know how much toxic stuff is on their books. Make a loan — fire a teller.

If C's market cap is now below 20 billion, does that mean the Paulson could have purchased the entire bank for less then he spent on the 'investment'?

perhaps the only safe haven is gold...

JPM chart is incredible. Falling off a cliff.

just an idle thought. There are funds/institutions that rebalance their asset allocations. That bond/equity differential has got to make them want to hold their nose.

Bloomberg carried a story last night about FNM & FRE suspending foreclosures until January, allowing more time for loans to be restructured. I thought this would be significant but no one seems to care. Am I missing something?

The six-week halt will begin Nov. 26, a day before the U.S. Thanksgiving holiday, and last through Jan. 9, the companies said in separate statements today. The hiatus is designed to give servicers more time to implement a streamlined loan modification program for struggling borrowers.

FAS RSI 7 day now 10.30

blue bluff -"pardon my retardation but I don't get backwardation...fireworks - care to explain? if not, that's fine, I plan on doing DD

fireworks might be busy, and I'm just sitting here thinking about 2009; so, here is a quick answer for your question.

Futures NORMALLY will factor in both risk and carrying costs the further out you go; so, when the current cost of a commodity like Gold is higher than the FUTURE's cost, there is demand for the commodity right now - that's called "backwardation".

The usual relationship where Futures cost more is called "contango".

Iceland - No flies, mosquitoes or snakes. Few trees, geothermal heating. Low crime rate. Finland growing nuclear.

http://www.icenews.is/

spot...silver guru Ted Butler on the rare backwardation issue...

"Backwardation, or inversion, is the condition in any futures market where the nearby contract months trade at a higher price than longer-dated months. It is the opposite condition of a normal, or contango, market, where the longer dated months trade at a higher price than the nearbys, reflecting the costs of carrying or holding a commodity over time. Generally, backwardations occur in non-metal and base metal commodities when there is tightness or shortage in the near term availability of a commodity. Because the shortage will be eventually eliminated (through the law of supply and demand), the longer dated months are not as expensive as the nearby months."

Here is another update on the physical gold shortage...

Perth Mint sales and marketing director Ron Currie said the unprecedented demand had forced the Mint to cease orders until January, with staff working seven days a week, 24-hour days, over three shifts to meet orders.

He said Europe was leading the demand, with Russia, Ukraine, Middle East and US all buying -- making up 80 per cent of its sales. One European client purchased 30,000 ounces for $33 million.

"We have never seen this before and are working right at capacity. And we are seeing it from clients in the shop buying one ounce, right up to 30,000 ounces from overseas clients," Mr Currie said.

Robert Jaggard, manager of bullion and rare coins dealer Jaggards, said business had picked up strongly and he expected it to increase further.

"All around the world there has been a heavy run on physical gold and there is a shortage of supply," he said.

Mr Jaggard, who has been dealing in gold for 40 years and is an agent for the Perth Mint, said some clients were buying up to $1million worth of gold, paying a premium above the spot price.

http://tinyurl.com/5g9j55

spot and fireworks - thanks, very interesting and informative

Grym "This morning I bought DGP."

I hope you've got a stop limit set up on that, there could be an event which changes the entire direction... You know how these things tend to go... (down with market?) You might get it cheaper later.

GG up 18 %
Au up 31 %
GFI up 26 %
KGC ip 16%

Gold up close to $50 !

Good day for gold stocks!!

I remember last December I was wondering why Bill was waiting on the call to pile into gold. I think it just reflected my impatience, not waiting until the right time in the market. Lately I've been dazzled and amazed again and again by Bill's clear, black and white calls. Yesterday, it was the the Trade of the Generation, and I am floored how immediate the results have been. Truly the trading wizard.

Despite my giant set backs, I will never give up, and I will get better and better at trading.

HGU.to Up 39 %.

LOL from 20 % loss to a 20% gain in a matter of hours.

enjoy

Dr. Cosa:u still holding those rockets

bsi87 good luck with the FAS trade. (FAST trade?!) just got long FAS at 13.50. Hasn't turned up yet but evil twin sister FAZ appears to be running out of steam on the 3 day chart...

Bill,

Would buying TIPS be the same as shorting Treasuries in terms of TOG? I understand that TIPS will produce income vs buying an inverse Treasury would create a capital gain. But in terms of divergence between Treasuries and Gold would it accomplish the same thing?

I have a bit of FAS. If it trades below RSI 10, I'll get serious. UYG hasn't capitulated.

IEF, SHY, TLT all in Triple RSI distribution mode.

ALOHA !!

Citibank has huge derivative counterparty exposure, which I am sure JP MORGAN knows all about since JP MORGAN is the number one global bank with the most exposure to derivatives.

On a different note you can no longer place orders at the PERTH MINT until Jan 2009. The historical record buying has created a backlog than needs to be cleared.

Dell getting beaten up for focusing on cost cutting and not market share. Now what would they be saying if it had increased market share at the expense of margins?

DIA max pain for Nov is 89. Should be an interesting afternoon. I think I'll make some popcorn.

No position.

Backwardation is a market condition where spot prices exceed forward prices. Contango is the opposite condition, where forward prices exceed spot prices. The terms are most commonly used in oil markets but are also applied in certain commodities and energies markets. In oil markets, the prevailing condition may reflect immediate supply and demand. If crude oil is contango, it may indicate immediately available supply. Backwardation can indicate an immediate shortage. Anything that threatens the steady flow of oil around the world, such as imminent war, tends to drive the oil market into backwardation.

so knowing the CDS markets fairly well b/c my clients deal in them, I'm wondering why JPM doesn't just become THE central bank. they have so much exposure to these markets and are often that counterparty in both directions. the LEH CDS's that were cleared netted like less than 5% of the notional value if I recall correctly. If this is the case, JPM has more than enough capital to cover all of this.

just thinking out loud...

"We're just a big version of Iceland."

Except that, you know, we can grow our own food.

Re. Maxpain:

XLF: 14
SPY:93
IWM: 55

It seems we either rally hard or maxpain goes down the drain.

Dell is not a favorite of anyone right now, the one Tech to ride out for a turn is HP as they are better positioned internationally.

Dell however gets 50% of revenues outside US. Dell does have $4.5 in cash (someone posted that, please confirm) on a $9.00 stock. I think they make great computers, and we're back to 1997 price levels and a PE of about 7.

I can believe there is less growth coming - but they are in India etc . I can believe sales will decline, but people & business will need computers before they need a new car, a new home, a new appliance.

It isn't a compelling buy, but I dont see much downside.

goldbug58 -

oneshare.com does that, sells single stock certificates, framed and engraved too if you want. here's Citi's
http://tinyurl.com/5aqbpe

CP,

Not this time. I bought only a small amount and am a firm believer gold is under valued now. Also, just bought a bit of DXD. As long as congress continues to continue "rescuing" us I am confident things can only get worse.

I haven't heard whether the plan to offer a renegotiated loans to those over 90 days in default passed or not, but...

How bright do you have to be to simply stop paying in order to get a deal? Brighter than congress is all, I guess.

This kind of expert "help" whether applied to houses, cars or whatever, is what has brought us to this sorry state.

We will never reemerge from debt until we have something to offer the world in exchange for them sending us things. Little pieces of paper just won't do it.

We should have learned back in 1956 with the book, "Why Johnny can't read." We could now do a sequel, "Why Johnny can't earn," to explain job losses and lower job quality.

ALOHA !!

Clarification to the PERTH MINT article.

You can place a purchase for the unallocated account of both gold and silver. The orders for delivery/fabrication are being restricted until JAN 2009. They have to clear the orders for shipment and it is AGR Matthey(Perth Mint supplier)that has imposed this temporary restriction not the PERTH MINT. I am told that some of the larger bars are still available for delivery, it is mainly the smaller bars and coins like the one ounce sizes. The kilo and 50, 200 and 400 ounces are available, but limited supplies due to first-come-first-serve criteria.

I am told the PERTH MINT has four shifts working and they have had machinery malfunctions due to the large and consistent orders being placed.

There will be a letter issued on Monday, Sunday in the USA, to further explain details since the article published at KITCO today was misleading.

"Except that, you know, we grow our own food"

Yes, we do. Unfortunately to grow food requires oil these days. Which we have to import. And if we had to pay for our oil imports in something other than dollars that we can print ourselves, we'd be hosed, much like Iceland.

Having said that, I will admit we're more self sufficient, but if at some point the world cuts up our import credit card the way they did to Iceland, all private use of gasoline just stops dead. The government would probably ration, prioritizing food production & delivery, but it would not be fun times to be a commuter with a job in Los Angeles.

I guess my point is, massive government guarantees are just great until they have to be seriously used, at which point the deficit explodes and the buck gets killed, and just maybe its enough to make our creditors decide they want a different world monetary system and reserve currency. And I'm guessing that "outside chance" is spiking gold today.

Of course I'm making up a narrative to explain market action. But if Citibank gets "rescued" without the taxpayers being involved, if my narrative has merit, gold will return to 740 again.

Does anyone know of an ETF that adjusts itself on a monthly (or weekly) basis, e.g., holding as basket of most undervalued companies by some metric. This would be an actively managed ETF (which would be similar to a mutual fund, but one with low MERs). Leveraged ultra/bear ETFs are managed and adjusted on a daily basis too, so it's not far fetched.

A somewhat similar mutual fund is the QSA101 Acker-Findlay Canada Focus).

Bill, how about offering something like this? Small investors need etfs though.

[Bill Cara note:

Please feed me whatever info you have. I agree with the need and initiated discussions a month ago with an exchange to set up Managed ETF's. I also have a co-sponsor lined up. If getting Canadian registration as a Discretionary Manager takes longer than I'd like, this may be the way to go. Re my application for Cdn registration, I have the highest quality securities lawyers an former regulators working on it.]

Nemo / Trading my chips: RE: Floor Pivots

Person is an author traderyou can google his book on candlesticks and pivots.

Pivots work fine especially with IWM and Qs, I use them mainly for day trading..that with breadth and trend quite potent in either direction.

All the best to your trading...up or down..who cares? :)

Grym - What's not to like, those little pieces of paper fully represent the best Congress money can buy. This and leverage are where value is added in today's America, not on the backs of the working class. Why else would Treasuries be favored during flight to liquidity?

Disc: holding equities, gold, trading PM miners in a race to the bottom (cash is by far my portfolio performer). Too late to sell equities I'm thinking.

"Orders for delivery are restricted."

The unallocated "gold" pool scam continues.

Get your cars here.....http://tinyurl.com/5mbr6k
2 for 1 autos

I sold a ABX for a 20% gain from yesterday. I think that gold will fall back down if the financials have a short covering. Then I will be buying ABX back again.

I am looking at FAS ($12.89) for a hold over the weekend. I think that the government will say something to get a temp rally going next week.

It would have been nice to have bought FAZ last week!

Bill,

Your near-prescient TOG call the other day seems to be working as expected. I noticed that GG warrants (2011 ) are up 45% today. Whether this is due to the C factor or backwardation - we can't rule out the possibility that the financial system has been brought down to the point where AU is again seen as the historical safe haven, store of wealth, etc.

Nemo: Hasn't GE already moved from 50% to 40% financial as a result of the -20% decline in assets when marked to market? If GE slashed the dividend in half to 4.5% would that be acceptable as an income generator? It would to me! In that vein, I give you MBT ( Manitoba Telecom ) a utility with a great chart, steady financials, and a solid high-yielding dividend. They avoided this year's CDN government auction of broadband spectrum that raised $billions for the federal treasury in Canada. MBT decided to wait and do deals with buyers who now face a different airscape and are now forced to give deep discounts if and when MBT comes knocking. DYDD

anyone using Schwab for trading? if so, are you having connection issues?

all - in comparison of USA and Iceland are interesting...

comment - USA is no different than the EU, UK, CAN, CHINA, JAPAN or any other nation out there...

All nations built on a house of cards.... if your betting against the USA and your bet pays off, the whole table goes.

rlogan
I use schwab and interactive brokers. Right now the streetmartpro interface on schwab isn't working for me...says to check my internet connection.
MCM

Trading My Chips wrote:

Pivot Points & Fib calculators;

... comments from posters using this system appreciated.

I have looked at these Pivot Points before in a very casual way but interestingly I decided to do some more in depth work with them relative to the 17 stocks that I either invest/trade or have on my watch list. I wanted to see if there were any patterns that I could use to help me establish Buy prices or Sell Prices. I started collecting the data on Friday, Oct.17th and am still doing so to date.

This means that I have 26 days of data. While I know this is not enough to establish any "rules," it has shown that in all cases a PP that was not filled in a relatively short period and became a lower PP of that stock as time progressed has eventually been filled, I.E. the price came back. The time to come back has varied but it has come back.

Based on this information for "my" stocks I made a comment in this blog a few weeks back that if I was going to buy SLW I thought I could get it in the $3.66CDN area. I based this entry price on the fact that its PP was 3.66 on Oct. 28th and it hadn't been filled as SLW started to climb from its lows. I should note that prior to this its PP was filled almost always in the next day's price action. As SLW started to come back down it had a PP of 3.78 last Thurs. which was not filled until this Mon and that day's action filled both the 3.66 and 3.78 previous unfilled mentioned PPs.

Since Oct 27th I have been in SLW at 3.99 and out at 4.15... in at 3.75 and out at 4.35... in at 3.78 and still holding as a longer term play.

I put the buy for 3.78 based on the past unfilled PP when it was trading in the low 4 area and IT CAME BACK TO ME. The numbers say I could have gotten it lower but with the present volatility I was confident that I can make money on this trade and I bought it at a price that was $2 lower than I bought it in 2005 when I made money on it.

I made a decision to buy SLW at this time for many reasons, some of them garnered form this blog over the past number of weeks. I referred to its RSIs, Macd etc but I did find the use of its Price Pivot patterns to be of great value in this instance.

CCC in the USA is on my watchlist and I have been tempted to take a position in it. Its PP was 16.60USD when I started and has gone to 18.55 then started a down trend on Oct. 21st.Ithad an unfilled PP of 10.14 on Oct. 29th after which its price moved higher... that PP was FILLED TODAY some 21 trading days later. I will pay more attention to it to see if this marks a reversal point and possible future support.

In summation, I think I can use the concept of PPs to help me determine comfortable Entry and Sell points for the stocks I do DD on.

Hope this is what "Trading My Chips" is looking for.

2 for 1 autos? ok by me, but sometimes I think that a couple of used electric golf carts and a small windmill recharger would meet the needs of most families who have space and don't live too far from commuter trans. When I retire, I think I will look for such a place to live. In the meantime, here is a link to home windmill construction for those who want to start this weekend. :)
http://tinyurl.com/6s3p5o

thanks mcm..getting the same...schwab is a pos

rlogan
just got streetsmart.com to launch from the new schwab login screen (which I don't like so far) so you might try that. Have to click around to figure out how to launch it.
MCM

got it to come up...

For the solar buff in all of us:
http://tinyurl.com/6847nb
Savitz in Barron's

Some ideas:

C Dec 5 strangle:
- 5 calls for .90, 2.50 puts for .67

JPM is also crumbling, trading at $20. Dec strangle:
- 25 calls for 1.50, 15 puts for 1.80

Finally, BCE trading at CAD 32. CAD42.75 buyout deal closes Dec 11. Deal or no deal? 33% gain if yes, you can hedge with a put. at ~10% of the US cost.

wasn't Citi involved in the BCE buyout?

unemployment rate in California jumps to 8.2%...

http://tinyurl.com/5dgwh8

(n2s- but in the Bay Area, it's lower, 6% for SF, and 5.4% for San Mateo county)...

i'm essentially all-in on a trade with FAS...average is now at 13.6. C will not fail. if it fails then the government has given up. i believe we will see a huge rally to close.

Some IFs:

If central banks presently value gold at $42.22oz...

If there is some movement afoot to create a "new world currency"...

If there is some truth to the rumour that gold's price is being controlled by someone or somebodys or some institutions...

If the "new currency" or existing currencies will be somehow valued in gold...

What would that value be?

If there seems to be an effort to keep gold at around $740...

Could that future value be $740?

Navid,

Here's my post from a month ago:

"The SNDK buyout is history. Not surprising in this climate. We should be hearing similar news any time now about the BCE $52 Billion leveraged buyout.

Let's look at the players here: Ontario Teachers Pension Plan + Providence E. Partners + Madison Dearborn Partners + Merril Lynch Global Private Equity together working to pay the moon with financing from Citigroup, Deutsche Bank and Royal Bank of Scotland. Are you impressed yet? The private equity players are having enormous problems raising money and hanging on the ropes while the banks are all but down and out and turning to governments for capital to stay alive. Because of a failing business model BCE was,IMO, no better than a $30(CDN) stock at the time of the announced deal. Today it is probably worth much less. Then again BCE stands to pick up a walk-away fee of over $1 Billion - but good luck in ever collecting it. Any ideas on how to play this one going down? "

When it comes to options trading I'm a novice. Is there a play here, anybody? What are the details? Thanks in advance for ideas!

i'm sticking my neck out...we will close significantly higher. people all across the board are fearful of the close. that's my reasoning.

(remember a time when making a closing call one hour out would be ridiculed?)

GG/SWC/SLW/AUY/WGW having a good day...

teamonfuego
Adding to my FAS position too. These 3xers are fast movers- wow! i'm afraid to leave my monitor for long...but the leverage is welcome if it moves in the right direction...
MCM

(and by ridiculed i mean in the sense of "ooh you're really going out on a limb and saying its going to close higher with one hour to go" type of ridicule)

I see Scotia Bank here in Canada has replaced their as slogan,

used to be "You're Richer Than You Think",

new one is "Make The Most Of What You Have".

I guess their customers have been opening their monthly statements and discovered,

"You're Poorer Than You Thought"

Geitner being announced at Treasury nominee

geithner new treas sec. not a good choice in my mind.

Could they not have waited until the weekend for the announcement?

Quasi- i can imagine the discussion at the last marketing meeting...

Just crossed the wire:

CNBC NEWS REPORTS TIM GEITHNER TO BE NOMINATED AS TREASURY SEC. BY PRESIDENT ELECT OBAMA
- nomination to be made Monday
- Bill Richardson to be named Commerce Secretary<

im seeing across the board buying even in my crappiest (short) stocks.

buying in

timely call teamonfuego. let's have some panic buying! yea! +155 and climbing!
MCM

TerryC
Re: BCE you forgot TD Bank. They have stepped into 'it' so to speak with the revelation they will be writing off $500 million in CDS's

i believe a ... monkey is in order?

I'd like to see that as well as I'm all in on the long side. Glad I moved a lot of money into the market today, although buying throughout the day could have been a little better timed...

God, this just gets worse & worse. I'm seeing the tone change on blogs & news from "we may be headed in a depression" and some already touting the "we ARE in a depression" headline. (of course now we'll all argue about how we define that).

Am I dreaming? I look at the stock market and I feel like nuclear bombs are flying over. I look outside and the sun is shininng and everything is fine.

Blogs are cool, but a lot of them are just turning into a gigantic feedback loop at this point. They all read each other and copy from each other, spewing the same conjectures.

actually, i'm not sure about geithner. i like that he has no wall street ties. i also hope he can hold a better press conference than stammering hank

[Bill Cara note:

I think the man is a most impressive speaker, although a bit abrupt. The question now is about the rest of the people on the Obama financial team to be unveiled next week. If this is a hint, I can only imagine... Bob Rubin, Hank Paulson, the rest of the Goldman Sachs team from Treasury, etc. This is not looking pretty.]

So, Geithner for Treasury Secretary? So much for change we can believe in...

[Bill Cara note:

It's 99% official now according to WSJ. Maybe at the Senate confirmation hearings, he will be required to pledge allegiance to the taxpayer who will have pay for the mess his Fed and their banks have caused? At least he couldn't be worse than Paulson. Still, I am appalled.]

case - in thinking more about this...i really like that he has no wall street ties. i think that's key for this post.

teamonfuego- allow me to congratulate you on sticking your neck out...

change we can believe in? More like change in our pockets ha ha ;)

[Bill Cara note:

As I think it was you who stated earlier, these bankers get to keep their freedom and we get to keep the change.]

Bob, yesterday you mentioned...

"The Caisse De Depot has aquired 58,600 shares of TCK at $CDN 6.63"

Today I see report from the ROB, Globe and Mail, that questions the financial health of Caisse, http://tiny.cc/8ffko

My first time tiny URL'ing a link, so hope it works....

BGU, TNA, TZA, BGZ - sharp precise tools I've been trading all day.

Filled on my SLW order. Missed the run up earlier, but it came back to me.

Small position. Close stop. Again, I think this stock is putting in a solid floor.

If I'm wrong, I'll know soon enough.

teamonfuego,

It's hard to be a Fed director and truly not have any Wall Street ties. Official, maybe not. Given the circumstances, it would add insult to injury for Obama to appoint someone in the likes of Paulson. But 'no ties' - I wouldn't dwell on that. Now the man may prove a capable agent for qualming things, given the carefully orchestrated mess we're in, but an agent of change as it was sold pre-election he is not.

Pardon my ignorance of the matter in its fullest, but would someone mind explaining why Geithner represents a bad choice on Obama's part? I know Cramer thinks he's a bad choice, but wasn't TG in favor of regulating the CD market a long time ago? I would think Obama would want to bring in people who saw this whole thing coming.

Wasn't Geithner one of the architects of this banks bailout that hasn't worked at all?

Why is it good news that he's treasury Secretary?

I could see it being good for banks and my UYG but I doubt it represents change in a way that our country needs. I just can't see him being any more responsible with our money than Paulson.

Rob.

LARRY SUMMERS TO GET SENIOR ADVISORY ROLE AT THE WHITE HOUSE
- reminder: Summers was the other leading candidate for Treasury Secretary

Wasn't Geithner in all those closed door meetings with Paulson and Bernacke?

If Obama was going to choose a FED bank president William Poole would have been a better choice.

Rob.

2nd,

WGW had an insider buy filed in Canada for 96,000+ shares bought on the 19th. No form 4 because its Canadian, I think.

CP, keep your eye on the -10eps thingy.

over at Mish's blog, he's calling a buy on gold and miners just like Bill

own Yamana calls, GG, Kinross

NICE close...rode up some yamana

"Wasn't Geithner in all those closed door meetings with Paulson and Bernacke?"

In a word, yes.

Not a bad lift off today - hope the thing doesn't come out of orbit right away. Have a good weekend.

bought a little FXP as an offset to my longs

teamonfuego- dedicating my first Asahi after work to you, man...

Mack - Ready to make hay, today's wave certainly had an effect...

Geithner, change you canNOT believe in. Very disappointed in this selection. More of the same on Wall St., less for Main St.

[Bill Cara note:

But didn't the bankers speak up when they heard one of their own would be Paulson's replacement? DJIA +494.]

I'm pretty much even on my DDM calls from Wednesday. I still need more from UYG though.

If today's metals rally wasn't another head-fake into expiration, my GG and SLW calls will start looking good soon as well.

So what's the opinion? Real rally or expiration fake-out?

Last rally topped at 9600. If this one is real do we go above that or make another lower high?

I really have no idea anymore. I would just like to see a sustained rally in something by next spring.

As long as it's not the ultra-shorts I'll be set up. I have financials, tech, and metals so if any one of those sectors can sustain a rally of 20%+ by next spring I'll be looking good.

When I bought these positions it seemed like a good hedge holding all three, since I thought one or two would rise as the other fell. Shows how much I know right? That's why I don't allow myself to "invest" more than 25% of our cash in the market.

But if we drop to DOW 3000 or something crazy like that I may have to reconsider but for now preservation of capital at 1% interest seems safer than going "all in" under these conditions.

Rob.

Does anyone think Geithner will force companies to show their full books like they're supposed to?

Will he have "special" Treasury Auctions to give the FED more money like Paulson has done?

I never heard Geithner say anything against what Bernacke and Paulson have been doing?

Does that mean Geithner thinks everything is working fine and the banks just need more money and everything will be peachy?

Paulson was the head of Wall Street and Geithner was the head of the banks.

Is there a difference between the two?

Rob.

Frankly, it looks pretty fake to me right now. There's really not much to go on here to say this is some kind of bottom, even IT.

If this were the bottom I would be laughing my ass off. Because there are exactly zero people on the planet who think this is the bottom right now.

So much for dreaming though :-).

I was throughly confused until I read this a few seconds ago:

"But didn't the bankers speak up when they heard one of their own would be Paulson's replacement? DJIA +494."

"Interesting stat of the day: I read this week that ETFs as a % of all trades now are up from 20% to 40%. Showing you what we've been doing is what many others have now adopted. The abandonment of individual stocks since fundamentals mean nothing, and just ETF trading left and right."

40% of all trades, wow. I guess that explains why all stocks are moving together. And why good companies and bad companies just don't make any difference. Everybody's trading ETFs so it all moves together.

We started with stock picking.
Then we got low-cost index investing.
Now I guess we end up with something in between.

Not quite sure this is any better to be honest. People always pile on into one method until it breaks.

Based on the discourse re the Geithner appointment I'm wondering if I should take my friday final-hour profits and put them into a monkeymarket fund on Monday?

My portfolio is warming up to this concept of change.

I did a trade today! I miss trading. :) I sold at $2.47 the 1000 shares of SWC I bought last week at $2.68. I really don't like to take losses, but when I was buying SWC at $2.68 (after a 25% drop that day), I thought I was buying it near THE bottom. However, SWC closed at $1.81 yesterday, so apparently $2.68 was not THE bottom. Besides, after learning yesterday that SWC might have to shut down if GM or Ford go bankrupt and cancel the contracts they have with SWC for purchasing 100% of their palladium in $368/oz, I figured that SWC is not a commodity stock that is GUARANTEED to be much higher a year from now. So I figured lightening up on SWC is a good idea (I still have 5500 shares). I might still buy these same 1000 shares if SWC drops below $2.

2nd - i'd like to think i'm really great at this thing, but it's been a humbling road to get to this day. still down big for the year, but we'll take it, right? i think this rally continues on through January, albeit with many fits and hiccups along the way. longer term (as in > 2 months) i'm seeing most likely down.

CP,
You're right on with that quote. The bankers are ready to invest again since one of their own will be running the money of the country.

I'm hoping this does turn into a short squeeze or something at least until DOW 9000.

I wonder who the bankers were expecting him to nominate. They were obviously fearful of someone to hammer the market like this the past couple of weeks. Maybe they thought Obama would nominate Ron Paul.

I would love to hear Geithner's comments on how he thinks Citi and MS are handling our money since their market caps are below what we gave them under the TARP.

Rob.

Re: If I had $10 million dollars (an example)

There are lots of examples of companies which require a capital infusion, but none of them have a 'hair trigger' effect hanging over them as much as GBN.V in terms of naked shorts, and an automatic trigger of outstanding warrants to be exercised at a certain price level. This one serves as an example. (not for retail investors. A retail investor would buy piecemeal until they feel satisfied that they have fulfilled their requirment.)

If I had $10 million dollars, I would buy at market in GBN.V shares a small gold company in development which a clear growth prospect. Enough shares bought at the ask to raise the price to 90¢ and hold it there for 15 days.

The reason why I would do this, is that it would trigger a time limit on outstanding warrants and cause the company to raise ~$11m. dollars in unexpected capital. (I think its that much, if I remember correctly)

The company would then offer a private placement to fill out the rest of the capital requirement, which I believe is ~$17m. dollars. An small expansion of the float would not significantly impair the company's prospects. But I would not participate in the placement, unless I was really certain that I could average down over time to reduce my cost. Obviously, I am suggesting something which goes against the trader ethos.

I assume there would be a price risk in doing so, especially after 15 days is up. The stock could collapse without support of a major buyer at market. The plan's goal would be to initiate production through buying at market.(not through drilling or discovery, but to implement a capital dependant cause.) Later, the outook would be to buy and hold through corrections and average down when the opportunity presents itself.

None of the drilling results and steps taken to enter into production has resulted in a boost to the share price, so I assume that any work done in the near future risks capital where buying at market is the shortest route to production, if it causes warrants to be triggered. Buying would be limited to the 90¢ ceiling, and if the shares run away above that, buying should be re-initiated so the 15-day deadline is reached.

I admit this is a very risky bet. But in the gold sector, there are very few growth stories, I believe GBN.V will be one, once there is a turnover in production. If we are in a deflation, then the initial investment will eventually become highly prized when no one in their right minds would invest in the company right now.

But given the action in the bullion market, it may be a sign that smaller companies like GBN.V should be the beneficiary of capital infusion, not through private placements, but buying at market.

There would be corrections to come, but by the time another major collapse in the market happens, a bit of dry powder would come in handy to reduce costs. Obviously, this plan assumes lengthy accumulation, as you would accumulate gold coins and bars.

Well we all know how much the broker dealers and general market skyrocketed back in summer of 06 when Paulson was put in place.

So what will skyrocket now that Geithner is ready to take his place. The banks would be an obvious sector. It would be great if the general market rallies like it did with Paulson.

I could see the FED increasing it's "loans" to banks to cover all their bad debt and then just quietly disposing of the bad paper and forgiving the loans.

If that's true then the banks will bet set to party. So, who will the banks use their party money to invest in? I would think the banks would like interest rates to stay low. Will the banks buy their own shares? or miners? or ETF's?

It seems the banks will be in charge from here and GS knew it. That's why they converted to a bank.

Rob.

[Bill Cara note:

Logic says that Geithner would never take this job if he truly believed that the credit default swap unwinding ould crash the Federal Reserve Banking system. As head of the NY Fed, he would come under heavy-handed scrutiny by the Senate confirmation on this matter, so he must be confident. That point alone is probably worth a couple thousand points on the DJIA index.]

teamonfuego: why do you think this rally continues through January? I think two things need to happen to allow for such a rally:

1. The automotive industry needs to be bailed out in December (if any of the big 3 fail, the impact on the economy and the stock market will be enormous).
2. Cash on the sidelines needs to pour into the market and overwhelm the $400B in hedge fund redemption requests received by last Friday (some hedge funds require only a 30-day notice, so even more redemptions may need to be processed), which translates into stocks that need to be sold before December 31.

What is your view on both of these items? If anyone else wants to share their views on these items, I'd gladly read all the opinions.

Thanks...

David - Here's my thinking:

1.) Obama inspires confidence. The market is severely lacking confidence and leadership.

2.) I think there is no question the autos get bailed out.

3.) I believe at some point soon they will establish a CDS exchange. This will put everything out in the open and will reduce opaqueness.

4.) We will get a huge infrastructure stimulus package.

5.) The sun will (hopefully) rise tomorrow...it's a Saturday so it better.

The cash on the sidelines will follow the rally that is provoked by these 5 things should they come. If not, bunkers, duct tape and spit shooters will be needed.

Longer term (not sure exactly when) I think we go much lower.

Old but interesting:

"In 1997, when the Asian Crisis broke, equities tumbled in a flurry of panic selling. Markets were down between 60 - 70% in the first downdraft. When Asian governments rushed to bailout their banks and corporates the market found its footing and rallied between 50 - 100% as disbelief was converted to relief.

All the financial engineering and arm twisting could not address the broader more deep rooted causes of the crisis and with time markets began to price in fundamentals. Asian market made new lows, between 20 - 50% lower than the 1997 lows.

2008 is a bit different. The scale is different. The world economy is in a synchronized slow down. But the psychology that drives markets is pretty much the same. Complacency, fiddling while Wall Street burns, somewhere there is a whiff of smoke, it turns to panic, the panic spreads, soon the fire is the least of concerns as a stampede for the exit begins, the fire is put out, order returns, people cheer, and then somebody looks at the ruins. Eventually, however, the rebuilding begins.

As an aside, in 1997, as Asian governments nationalized parts of their economies, forced consolidation upon the banks, spent the public coffers on bailout plans, the IMF, the developed world and every academic worth his publications condemned these non market solutions that would doom the region to failure after failure. "
http://bgyl.blogspot.com/

Sound familiar?

re: ETFs being 40%

Wow. I am long good miners, and short bad (cash strapped) miners. That explains why on day's like today they all go up 15-20% and I'm shaking my head. ETFS! Argh!

ALOHA !!

Is this for real? If it is then why is this not fraudulent?

Stores that are planning to close after Christmas are still selling the cards through the holidays even though the cards will be worthless January 1. There is no law preventing them from doing this. On the contrary, it is referred to as "Bankruptcy Planning". Below is a partial list of stores that you need to be cautious about.

Circuit City (filed Chapter 11)
Ann Taylor- 117 stores nationwide closing
Lane Bryant, Fashion Bug ,and Catherine's to close 150 stores nationwide
Eddie Bauer to close 27 stores and more after January
Cache will close all stores
Talbots closing down specialty stores
J. Jill closing all stores (owned by Talbots)
Pacific Sunwear (also owned by Talbots)
GAP closing 85 stores
Footlocker closing 140 stores more to close after January
Wickes Furniture closing down
Levitz closing down remaining stores
Bombay closing remaining stores
Zales closing 82 stores and 105 after January
Whitehall closing all stores
Piercing Pagoda closing all stores
Disney closing 98 stores and will close more after January.
Home Depot closing 15 stores 1 in NJ ( New Brunswick )
Macys to close 9 stores after January
Linens and Things closing all stores
Movie Galley Closing all stores
Pep Boys Closing 33 stores
Sprint/Nextel closing 133 stores
JC Penney closing a number of stores after January
Ethan Allen closing down 12 stores.
Wilson Leather closing down all stores
Sharper Image closing down all stores
K B Toys closing 356 stores
Loweʼs to close down some stores
Dillard's to close some stores

That's a lot of stores closing!!! Somehow I think we could close half of all malls in the USA and we wouldn't miss them!

So if you buy a gift card from ZALES in Dallas, Texas and the store closes then you have to drive to their store in Shreveport, LA or El Paso, TX or go online to redeem your card. I could never treat my customers like that, but then I was never trained at Ivy League schools ...

Is PIERCING PAGODA what I think it is? Oh My God ... Hello ROME!!! There was a day when tattoos were only worn by drunken sailors and prison inmates and piercing was for circus freaks. What happened? Is not the human body good enough as God created it? For some it is art, but for me having worked for some ten years inside prisons all over California it was aversion therapy! I have seen enough super violent criminal tattoo yous to last me a life time! Heck, now days I think half the people get tattoos to project an image of "don't mess me with man" ... "I'm a dangerous dude man" ... "I will take you down"! Nine times out of ten there's absolutely nothing there to back it up! DREAM ON ...

When I see the tribal tattoos here in Hawaii and in New Zealand worn by the Maoris I can respect that. That is family(Ohana) and it goes back a gazillion years but white dudes with Maori tattoos ... give me a break! To me that is sacrilegious! If the white man didn't ruin Polynesia and its culture I could get behind it. So, what is it with the tribal type tattoos on white dudes? Guilt?

I have some Maori and Hawaiian and aboriginal friends, some of whom I have known for 30 years or more. I love Maori art and I support a Polynesian artist by the name of John Puhiatau Pule. He has also written a number of novels and poetry that are more well known in New Zealand and Australia, but little known here. I have known him since 1996 when I was traveling in New Zealand with my wife. I have a few of his original works.

Here is a link to Pule, he's quite prolific(look at his bio) ...
Link: http://tinyurl.com/5zl5se

I support the Polynesian culture and I have a deep respect for their struggles in coming to grips with the Euro-American version of life. I have been this way ever since I lived in Australia(1970s) and started traveling around the South Pacific, but I really got in touch with the history in UNI, when I read the book "THE FATAL IMPACT", by James Moorehead, for a PACIFIC HISTORY class. In actuality we Americans have a lot in common with the American Indians and the Polynesians. We fought off European EMPIRE(mainly British)and won our independence, but we blew it when we decided we would emulate Britain, complete even down to the tyranny of the Bank Of England(US FED) and the KING!! Why after centuries of being oppressed by Britain and the KING would we then go out into the World and oppress others with our military might? Look what we did to the American Indians and the Hawaiians. Isn't that what the British did to us? We are still doing it today! We have become the EMPIRE we so utterly despised and revolted against back in 1775. WE ARE THE EMPIRE NOW!! ITS US NOW ... NOT ROME ... NOT EGYPT ... NOT ENGLAND ... NOT SPAIN ... ITS US!!! THIS TIME IT IS US!!! I'm all for breaking the EMPIRE mold and throwing it in the trash. That's where it belongs! That mentality only benefits very few while it impoverishes the vast majority of the World's population and even US citizens!! This EMPIRE OF DEBT does that ...

I don't know and I am way off tangent here, but American culture has sunken to desperate lows. I wish we would just stop our global meddling as if it were our privilege as EMPIRE to meddle. God knows, Hillary Clinton will set things straight, right? Here comes US FOREIGN POLICY genius ... stand back!!

This is part and parcel my argument for the elimination of FIAT and the US FED and to shrink the US government by at least 50%. We need to make government anemic not all powerful. How do we know life can't be better with LESS government? Have we ever tried it? NO ... but we sure as hell cling to the false hope and UNchange we get every time we switch political power! What is there to fear? Are we so afraid of CHANGE that we will stay in the lunacy no matter how bad it gets? I think so ...

COME ON "DC" LEAVE THE WORLD ALONE FOR ONCE!! DO we not have enough of our own problems right here in America? Why fly off to Baghdad and occupy them? That's what the British did to the Colony. That worked out well for the Brits! I think we made our statement ... "DON'T FLY JETS INTO OUR BANK BUILDINGS"!

Off tangent(tattoos and Empire)? Hey, its Friday and being off tangent is allowed isn't it? I equate it to ALOHA FRIDAY ... casual day where you get to dump your suit and put on a flowery Hawaiian shirt! CAN .. CAN, BRUDDAH!! But then again I do that every day ... sort of!! HA!!

THE WORLD STILL TURNS even with our human brilliance ...

teamonfuego:

Your items 1, 3, and 4 are definitely important, but it looks like they will manifest themselves AFTER Obama takes office in February. So my thinking was that we go lower until December 31 and THEN the rally will start. That rally will ultimately fail and lower lows can be hit if the economy turns REALLY bad.

As for item 2, can you please say a little more about it? I would love to hear your reasons as to why the auto industry will definitely get bailed out in December. The Congress gave them no money upon the first request, so apparently strong forces are opposing this bailout. Or do you think that asking them for a plan of economic viability is just a "political show," since it will be harder to oppose the bailout once a plan is presented?

ALOHA !!

Look you guys quit trying to figure out the auto makers BAILOUT chances! All they have to do is follow HANKY PANKY'S lead and attach a huge glob of PORK(political KY Jelly)and they can name their price! Isn't that what got the $700bil through? PORK WORKS WONDERS IN DC!!!

What's guaranteed after OBAMA gets past his 100 days is the demise of the US PESO purchasing power!

Kaimu:

on Tattoos:

We are one culture: Humanity!

In that we should all intermix and share in the traditions to keep us united as humanity rather than us or them.

However, wearing enough ink myself, which I use as keys on the street, you must understand the respect they also represent.

To just slap a marking on yourself shows no respect. Placing a mark on yourself doesn't in itself impart being part of that community unless you pay back with respect to the community it represents membership within. I see too many kids or adults placing ink on their body without that understanding which just shows no respect and invites some serious arse kicking or laughter. Sad really. For example it irritates me when poseurs place jail marks on themselves without knowing it for the case or trying to ride the mark for the badness factor... Oh well so it goes.

To be in Humanity is to also accept its silly poseur side also.

Having said that I would like to see some jail tattoos for a few high officials about now...

blue bluff - You're familiar with the GE story I trust. If not, have a look:

http://tinyurl.com/564skc

Come to think of it, GE could be the catalyst for our next crisis...

For anyone with interest, here are my updated junior gold producer watchlists:

Under 50k oz. production:
AMC.TO ANX.TO AVK.TO CAH.AX CGM.L CGR CMM.V CSG.V CTO.AX EXM.V FML.AX GMA.L GOZ.V LOV.V MTO.V MUN.AX NGG.V NIS.V PMU.TO PNA.AX PTQ.TO RCT.V SAM.TO SGR.V SIM.TO SLR.AX SRB.L TRY.AX

50k - 100k oz:
AVO.AX AXM.AX BCD.AX CGLD.OB CRU.TO EET.TO GBG.TO LMA.TO MAI.TO MDL.AX MIRL.L ORV.TO OXS.L RIC SBM.AX UME.V VGM.L WDO.TO

100k oz +:
3330.HK AGI.TO ARZ.TO AVM.L DOM.AX GRS HRG.TO IAG JAG.TO JIN.TO KCN.AX MDN.TO MFN NGD NGF.AX NGL.L NXG OGC.AX PAF.L QUA.TO RBI.TO SGX.AX SMF.TO WGI.TO

Just a watchlist, not an endorsement of any of these companies. I find that watching the list as opposed to individual issues gives a better idea of collective market.

I am interested in trying to create an index. I have found "junior gold indexes" but not that are for producing companies only. If anyone has any recommended materials on how to construct/track an index, please post.

As for the gold market (and markets in general), awesome move today but like most everyone I have reservations about celebrating any brief shades of green that are sprouting on red mountain.

Have a good weekend ya'll!

PS.......Its getting pretty darn cold in my neck of the woods. A friend of mine works at a local foundation that supports homeless rehabilitation and tells me they are running low in their food pantry and limiting requests for food to once per month for their clients.

Support your local food pantries that are in dire need of support in a year like this. be creative...have your friends/family each bring a few cans to Thanksgiving or Xmas dinner or your Super Bowl party. A friend of mine even convinced his boss to allow anyone who brings a few cans in per day to wear jeans to work - what reasonable boss would nix a plan like that? Time to join the social committee and make it work for you!

FROM NYTIMES:
In June, Mr. Geithner called for an overhaul in the regulation of the financial industry, declaring that the current system of supervision was "confusing" and generated "perverse" incentives for financial participants. In testimony before Congress a month later, he said more federal oversight was needed.

I hope he is pushing for an exchange for CDS contracts...

Also, it's noted that Geithner was against letting Lehman fail, in stark contrast to Paulson.

A couple of observations for what they are worth!
1. When I look at a chart and want to test my bullish or bearish feelings I will invert it in my charting software. Sometimes this nullifies my current mood (bearish at present) about a market. Try it if you haven't done so to date, eg if you invert the monthly chart (semi-log) of the Dow from the mid 60's on and look at the current action you might (I would) think that this accelerated move "up" cannot last. More often than not accelerating parabolic moves run out of air and fall quickly back (look out below). Just look at NYSE:PTR a year or so ago.

2. If you apply Fibonacci lines to the same Dow chart you will note that for the 1982/87 bull market the correction in 1987 turned back up from near 50% simliar to where we are now at in the 1987/2008 market. Will history repeat itself? Who knows, but the master of Pisa has an uncanny success rate.

As an optimist I'm tired of being bearish. Is that a bottom indicator?

Just getting caught up from today's action. Very interesting the actual timing of the t. secr news and the rally.

anyway, i thought obama was for change? now the fed has a demon child who was appointed by the president to the post of t.secretary. Pretty scary.

Who bought slw? i still own it. thinking whether i should have sold today at $3.10+. why would it spike on the news of Rany Smallwood to the board of Ventana Gold? i guess more silver for slw to sell?

will there be a santa clause rally this yr? or just the grinch dressed as santa?

goog hit $240 today huh. maybe i can own this for $95 in 2009.

In all seriousness, anyone here making $ writing the $150 puts on google?

"I think two things need to happen to allow for such a rally:"

david-

"1. The automotive industry needs to be bailed out in December (if any of the big 3 fail, the impact on the economy and the stock market will be enormous)."

(my intention is not to disparage workers in this industry, but) Look, the US auto industry can NOT continue doing what it's been doing. What's stopping the Big Three from making money? If I had 5 kids named Ford, GM, Chrysler, Honda and Toyota I would tell the oldest three to get their s--- together NOW. I like Colin Twiggs' comments: "Congress can help, however, by offering rebates to buyers of fuel efficient or alternative energy vehicles; forcing the big three to compete in the open market. Let the buyer decide whether they are worth saving."

"2. Cash on the sidelines needs to pour into the market and overwhelm the $400B in hedge fund redemption requests received by last Friday (some hedge funds require only a 30-day notice, so even more redemptions may need to be processed), which translates into stocks that need to be sold before December 31."

i think you're right about the need for buyers...for every seller there needs to be a buyer...for every hedge fund selling there will be a smarter one buying-> a few have been quietly accumulating in this market (ie, the same ones who sold at the high last fall)...some of the more public buyers (Buffett, for instance) are taking hits (both from falling stock prices and from idiots) right now, but IMO, even they will be proven right over time...i don't think cash stays on the sidelines for long, not at these MM rates...we'll see...

jasper, jogyp, moneygenie-

are all of you still out there?

2nd
If you remember
One of older trader told me that C/BACMS are 10 dollar stock and I posted that
He said C and GS want to merger and I posted that
Look now he is correct about what he thought.
He told me today that we have seen bottom. Let’s see if he is right,

C/BAC/MS

vinod- i'm moving towards trying to trade the upper and lower bands of any trading range that may develop...the problem, of course, is waiting for a range to take form...and MY problem right now is seeing any kind of strength to sell into; i missed my first chance with the run-up into 9800, and unfortunately, that has so far been the only opportunity...i know people like you and FarAwayEyes went to cash at some point and have been successfully day trading your way back, but in all honesty I don't have the GUTS to do that...

The market has lost over $8T as of last month, what's another 400B? Perhaps the auto industry should retool to produce infrastructure rolling stock, Americans won't be buying many cars for a few years?

Mackinaw - Take a peek at ADVNB...?

2nd
If you went to cash on november 4. you would have done great.
I found that trade that was hard for me to do. my heart and mind did not wanted to do. i did and it was profitable lately

vinod - It is bottom if Obama gives banks full control?

2nd
also who new that we will get stuck in once a life time event?

Chickenpookie
congrate on your GG trade. i got stop out, you hold them and you did smell like rose

Chickenpookie
they cann't let C go under. they got burn for let LEH go bankrupt.
and they will bail out AUTO. it will be too sensitive politically not to bail them out

http://tinyurl.com/6fklve

Market Monitor - Nov 15 - Stan Weinstein
PBS Nightly Business Report

I didnt agree with everything he said, but he has a lot more money than I.

Why'd they do it?

Citigroup selling umbrella logo in rebranding
By Michael J. de la Merced Published: February 14, 2007

http://tinyurl.com/66keol

"Built from a series of acquisitions by Sanford Weill, the company's former chairman, Citigroup has encompassed both retail and investment banking operations, credit card businesses, wealth management and many other services.

Perhaps the most prominent result of the rebranding is the sale of its red umbrella, a 137-year-old logo (and a 16-foot, or nearly 5-meter, steel sculpture outside its investment bank in New York's financial district). Citigroup said the logo bore little significance to its current businesses.

"Our research continued to show that the trademark red umbrella was more connected with insurance, specifically St. Paul Travelers," Prince said."

Should have taken less than 15 months to figure out that changing the brand isn't such a good idea after all... stock never recovered.

Travellers is only down 25% this year, beating the index.

http://finance.yahoo.com/q?s=trv

Citigroup is down 88%.

Bad juju! :)

Commerce Bank to be officially rebranded
Friday, October 31, 2008
http://tinyurl.com/5txp7p

Stock hit a peak Nov 4 and cratered to -50% over year.

Nothing to do with the broad market of course... :)

vinod - thanks, I should have held GG longer, news comes without warning so if I'm above water I'll take it off too soon.

I like your 10 min trade strategy much better.

Anyway, looking at the big picture gold will win in the end. Strange the action is one foot in the commodities and another foot in the inverse currency. Today was currency action, tomorrow maybe commodity.

GE is still rated AAA Ha,ha,ha!!!

2nd
some fund are buying URE a lot

URE is going for 20% discount to NAV

Lending money to someone who can't repay isn't innovation, it's stupidity. It certainly isn't AAA.

"Perhaps the auto industry should retool to produce infrastructure rolling stock, Americans won't be buying many cars for a few years?"

CP- that's exactly the kind of 'radical' thinking the industry needs to engage in...china and india are now ramping up; how many car companies can the world support? i would wager the number of times US auto executives exhorted their employees to 'think outside the envelope/box' numbers in the thousands- an empty phrase for the most part... they probably rejected most ideas sent their way, if they even bothered to read them...too busy worrying about the envelopes containing kickbacks from the union or parts manufacturers...

vinod- speaking of URE, i remember looking at PLD when it was in the forties, thinking it would be a buy around 25...it closed today at 3.04 (and that was after a 33% spike from yesterday's close of 2.28)...this bear market has been a great lesson in how far prices can move (either way)...

Why are balance sheets kept opaque? Because AAA ratings are assessed based upon publicly available information.

PLD, btw, had earnings of 2.12 per share, giving it a P/E of 1.43...(yesterday's P/E was about 1!)...

"if they even bothered to read them"
You got it! "Shut up and assemble cars, we're not paying you for your ideas"

re PLD- "ProLogis also lowered its projected dividend to $1 a share for 2009, revising the $2.28 a share level it previously announced."

http://tinyurl.com/5olvvb

wow...

PLD..can you imagine a (projected) annual dividend payout that exceeds the share price? it came pretty close to that scenario about a week ago...

2nd
Thanks for reminding about PLD.
will be on buy list for monday

vinod:

I suspect once in a life time events happen once a day, if you approach every day fresh and with new eyes. :)

They are kinda like 100 year storms in our life, except when global warming is around... or when the market is crazy like this...

keep those eyes open my friend.

vinod- at that price, even I can afford to buy a few shares ;)

Casey Kochmer
Thanks. your comments are always good food for my mind

Hm. silver up a little more than gold today. SLW up on heavy volume. i guess it wasnt up just because of the news about Ventana board membership.

AH....the thrill of the chase and the glint of metal today!

Is there going to be a wake for Citigroup tomorrow? I see the Citigroup Trust, Delaware HQ is listed as 5 stars on Bankrate.com

What a difference a day makes? :o)

Mr. Geithner grew up in Asia — in Tokyo, New Delhi and Bangkok — and keeps his ego well in check. He asks a lot of questions, but does not have Mr. Summers’s overwhelming — some say overbearing — personality.

Vinod, Is Geithner an insider with an ethical bias? Personality is telling: I spent years in New Zealand to unlearn how to be an American and learned that their apparent 'reserve' and lack of ego can be misleading.

ALOHA !!

So now we are not only dependent on OPEC oil but their "loans" also! Won't the IMF loan the USA $300bil? How about NATO?

Let the begging begin in earnest ... Here goes the US EMPIRE and when EMPIRE goes so does its money ...

So the DOW rallies on yet another idiot moving in at the US FED! What does it matter? The damage is done. It is time to eliminate them quite simply because they have failed just as bad as LEH and GM!

This is beyond sad ...

READ ON:
US seeks 300 billion dlrs from Gulf states
Thu Nov 20, 2:29 am ET

KUWAIT CITY (AFP) – The United States has asked four oil-rich Gulf states for close to 300 billion dollars to help it curb the global financial meltdown, Kuwait's daily Al-Seyassah reported Thursday.

Quoting "highly informed" sources, the daily said Washington has asked Saudi Arabia for 120 billion dollars, the United Arab Emirates for 70 billion dollars, Qatar for 60 billion dollars and was seeking 40 billion dollars from Kuwait.

Al-Seyassah said Washington sought the amount as "financial aid" to face the fallout of the financial crisis and help prevent its economy from sliding into a painful recession.

The daily said the United States plans to use the funds to help the ailing automobile industry , banks and other companies suffering from the global financial turmoil.

The four nations, all members of OPEC, produce together 14 million barrels of oil per day, around half of the cartel's production and about 17 percent of world supplies.

The four states are estimated to have amassed close to 1.5 trillion dollars in surplus in the past six years due to high oil prices that rocketed above 147 dollars in July before sliding to just above 50 dollars.

The daily also said that the United States has asked Kuwait to forgive its Iraqi debt estimated at around 16 billion dollars.END

Hank Paulson - Here's what should be done with at least $40B of your friends party money:

http://www.fdic.gov/consumers/loans/loanmod/index.html

Or is it true you've thrown in the towel?

ALOHA !!

Perhaps we should take a hint from the German President ... What's Kohler going to say when the FED RATE is at 0? In a currency crisis there is no need to worry about FED RATES. Besides all any central bank can really do is PRINT OR NOT PRINT! We have all been witness to that successful strategy.

CITI? Now the USA needs a BAILOUT! What happen to the power of the US TAXPAYERS? US Sovereign credit ratings are coming down ...

What must our trading partners think when they see their goods and services coming to America in exchange for an IOU and then we turn around and ask for a $300bil loan? I know what I would say to one of my customers if they asked me for a loan to buy my flowers! HA!! Too funny ...

Forget the German banks and their failures, look at the US government and its accomplice the US FED and their too numerous to list failures.

So here we are on another weekend of drama wondering if GM and C will exist by Monday. If they are saved then who's next next weekend? Its never ending.

None of this is US PESO positive ...

READ ON:
Germany’s president lashes out at bankers

By James Wilson and Ralph Atkins in Frankfurt
Published: November 21 2008 12:12

Bankers should stop pointing the finger at others and acknowledge their part in the financial crisis, Germany’s president said on Friday in some of his harshest criticism of the behaviour that contributed to global market turmoil.

The most important task facing banks was to win back trust after having been blind to risk and detached from the real economy, Horst Kohler told a financial sector conference in Frankfurt.

Investors had chased profits while the US Federal Reserve had kept money artificially cheap, Mr Kohler said in comments that seemed aimed at German and other European banks. “But too many of you ... ignored the multiple warnings and preferred to play along, rather than going against mistaken developments.”

Mr Kohler warned banks not to let down “our Mittelstand” – the country’s strong sector of mainly family-owned industrial companies.

“They deserve trust. Even in the crisis. A panicked slashing of bank balance sheets does not help anyone. Bank supervisors should also be aware of that.”

Mr Kohler, a former managing director of the International Monetary Fund, has become unusually outspoken for a German president as the financial crisis has progressed. He previously referred to financial markets as “a monster”.

On Friday he called for bankers to return to simpler banking practices. “Do not only rely on computer models, and test what sort of investment banking really creates value,” he said.(more)

Barack Obama - For Treasury Secretary, please tell us you have selected a person with regulatory experience and background, not someone who is an investment bank sympathizer.

"Mod in a Box" Amazing did the FDIC really coin that term? To say their process of modification is slow would indicate they have not trained their own banks on how to accomplish the task. An understatement. I have spoken with modification pros (lawyer/lender teams) and one client I could not help is going through the process now comparing both non profit and paid service.

When banks modify you lose.

ALOHA !!

I have to ask ... What if OPEC turns down the USA $300bil BAILOUT?

They'd have to be idiots to say YES after watching what happened to the $700bil US BANK BAILOUT and then watching their investments in CITI and GS and BAC collapse.

According to the article it took the four OPEC nations close to six years to amass $1.5tril in oil profits and it took the US FED less than two weeks to create $1.5tril of BAILOUTS out of thin air!

FAITH AND CREDIT ... FAITH AND CREDIT !!!

ALOHA !!

The USDX is a sham ...

If it were truly an HONEST measure of the US DOLLAR it would be trade weighted against our biggest creditors, ASIA, and not Europe. What are we importing from the UK and Switzerland and Germany? Lets see ... U2 dvds from the UK? Uh ... Nestle chocolate from the Swiss? BMWs from Germany?

Over 21% of all China's exports go to the USA and we export only 7% back to China!

The basis of a "sinking currency's" worth should not be based on how much DEBT it can print and how much its TAXPAYERS can be taxed.

You cannot settle DEBT with more DEBT ... That is FIAT currency!!

loannetter - Feel free to submit your suggestions for Sheila and Hank, now's as good a time as any?

Playing the Ultras and Citi

ETF's times 2 and 3 are scrambling after hours for bank stocks to cover their longs on Friday. That is what I make of reading the Google page moments after close of trading tonight. Is that why some one pay $5.44 for 1840.83k shares moments after the bell for C when it closed at $3.77 or $12.03 for BAC when it closed at $11.47?

I might be way off but I think that last large blue line is the volume spike for the ETF's I am seeing in each stock end of day. So why else would such a premium be payed moments later after hours for what is going down in flames after hours and who make the killing? Finishing the position I think.

Just slowly roll over the last moments of the day and a phantom gray dot shows the purchase at Google. It is in most bank stocks today.

Might there be a new type of day trader who feeds the machine moments before the bell. The more that the market moves the more the ETF is forced to buy moments after the bell to close the position for the day.

[Bill Cara note:

This was a terrific day of Discourse. It started out a bit rough, but flourished as the day went on. I'm sure the weekend will prove to be the best yet. Thank you everyone.]

ALOHA !!

So what have I been doing this week? I am not on the sidelines and I am not in the DOW or anything denominated in a US PESO! I make it a point to never BUY at the top! The basis for all your trades on the DOW that get discussed here is the US Dollar. All the DOW trades are denominated in US Dollars. I am buying top producer companies with huge PPE on markets where the commodity currency is down. If you are buying the DOW then you are buying at the TOP of the USDX chart! The USDX is for money traders and is not a sound basis for discerning monetary fundamentals.

I am buying on the ASX and buying gold and silver. I have also been adding to some junior positions at these cheap levels like ECU(TSX). On the ASX I am buying SRL only. Look, the currency discounts on the AUD have made the ASX too good to pass up if you are a solvent American and don't need a BAILOUT!

What I would not be surprised to hear is that HANK PAULSON and BEN BERNANKE have convinced the US government to sell them all the US gold reserves and they are paying for them using the $700bil BAILOUT money! HA!! Where's the PORK?

Hummmmm???

Why did Paulson say there is no timeline left to use rest of the TARP funds and immediately after financial stocks started getting hammered? And now these guys are scrambling to do another bail-out. Is he really a clown or is this all part of a well orchestrated strategy? Whos really benefitting from the last hour programmed trades ?

ALOHA !!

Aren't the ETFs just "specialized" mutual funds where you trust your money will be managed honestly to meet your goals?

When you buy an ETF most people do not even know where their money is and who is trading it on a daily basis. Do you know? Does CNBC even have ETF managers and custodians on their show to discuss their derivatives strategies? I don't know, I don't have TV ...

Even if a ETF has funds in cash do you even know where or who holds that cash position on a daily basis?

A lot of OPM is at stake in ETFs daily with hardly any disclosure at all. Where have I heard that story before?

Kaimu,

i am afraid to ask, but what are your suggestions to fix it? or is it too late or too painful to fix, and i should just go trade in my car for a tank asap?

ALOHA !!

Long term Caraistas here know that I have done research on certain ETFs and even written a published article on Ultra Shorts and in my research I found that some the top listed managers had degrees in unrelated finance or market specialties like mechanical engineering. What was an MBA for these guys a "safety net"? Something to do in case their HVAC business went sour? HA!!

Then there is those "illiquid trade" clauses in every ETF. Not something I would want wrapped around my neck in this environment.

GOING ... GOING ... GONE!

Chickenpookie, Is Hank married to Sheila? Perhaps a Reverse Mortgage is the answer if both are over age 62 and their home is not hocked to the gizzard. His lack or income won't be an issue, thankfully.

I am watching the zeitgeist in full tonight. I was too afraid to when someone else posted it here.

how depressing to know some of the content is true, but we remain helpless.

ALOHA !!

NYUGrad ... How much is OBAMA going to spend on his inauguration? That's the mentality as the US CONgress chastises the Car CEOs for having private jets! They are all corrupt ... This is a government of the PEOPLE for the benefit of only a very few PEOPLE.

It cannot be fixed until the monetary system is fixed ... PERIOD! I'd start by eliminating the US FED and then go top down slashing BIG GOVERNMENT agencies, especially the ones duplicating State agencies. Hardest hit would be the PENTAGON. I would recall all US bases globally. What are we afraid of? We have enough nukes to blow up the World 100 times over! Then the US government(two parties)will just have to renege on all its promises. We will be forced to do all this later anyway, so I say do it now and get it over with!

We as a NATION have totally trampled on COMMON LAW for over 90 years now. We are in everybody's business globally.

Why do you think the GAO-US Comptroller General quit?

I have been alive for quite some time now and the BAILOUTS just keep getting BIGGER and more NUMEROUS as the years go by. I am not even talking about the 24/7 365 BAILOUTS(welfare) to every major US Corporation since 1913.

America needs a ground up complete renovation of every aspect of money and government. We need to refocus on a NATION that supports small business and the people that have "real jobs"! Welfare and especially corporate/bank welfare is out of control. My wife works for APS Healthcare and she comes in contact with people on SSI who actually believe somehow they "earned" the money they get every month! It si no different with major US Bank and Car CEOs. Its in your face on TV every night. These CEOs actually believe they have somehow "earned" a BAILOUT! This mentality has got to go and it needs to be rooted out in a harsh manner that takes no prisoners. LET THEM FAIL! What they have earned is the right to FAIL, nothing more ... nothing less.

Anything short of total repudiation of EMPIRE is just pushing the agony onto future generations until the entire system collapses. That's a total MONETARY CRISIS ...

deep down inside i agree with you kaimu. in my own 32 yr old juvenile eyes, i too feel like its just all out of control.

but knowing a) anyone with power or elected to power to really change this will be dealt with and b) 99% of humanity operates away from individual pain vs toward what is right or just for the society. how can society engineer this?

I have been thinking through this and the only real way is for some grass roots movement by every employee, family, soldier, slave, begger, etc to all revolt and stop all production and stop using paper currency/banks. then we would need the resources to live off the land until the corrupt give in.

otherwise its the same thing wrapped up in diff packaging. i guess this is a slow process where society waits for the pain of fiat money surpasses the pain of wage slavery. maybe a depression part 2 is needed to overthrow the establishment, where society truly has nothing else to lose and revolts?

Maybe the aliens land in 2009 and crush the idea of religion and challenges the social rules we live by on earth?

this is what happens when you are left alone with wine and a documentary on google video.

"can u still get stock certificates? i'd like to buy one share of C to frame for my wall as a souvenir of this carnage - wonder if my broker'd go for it?"

-Posted by: goldbug58

"goldbug58 -

oneshare.com does that, sells single stock certificates, framed and engraved too if you want. here's Citi's http://tinyurl.com/5aqbpe

-Posted by: gdiman

Goldbug,

Being the coupon-whore that I am, I found this for you: when you go to the OneShare site, use the following promo-code at check out for 33%off the transfer fee (approx $12.50 discount):

FEE33

Deal is good thru 11/30/08.

Cheers

priceless! thanks, mojo!

http://tinyurl.com/6aql4o

Saturday Morning Coffee: when pharaohs become pariahs...

While all (except yesterday's rally) seems out of control and depressing/recessing, the people keep going. I've provided a couple examples but In N'Out Burger is a lot different than say Ruth's Chris, where we had dinner last night.
The Woodland Hills Ruth's Chris was absolutely packed. We keep hearing about how horrible the fiscal situation is, but there are a lot of people spending in the places I visit so not everyone is on the skids.
The Woodland Hills RC is pretty good, but Seattle is still my favorite.
BTW, on my way back to the hotel I passed
In N'Out at 10:30 PM.....the drive through was still backed onto the blvd. and the parking lot was full.

Cara 100 WMT:
"Talk about a holiday surprise. Retail giant Wal-Mart Stores (WMT) announced just a week before Black Friday, the biggest sales day of the year, that it would have a new chief executive officer come February. Lee Scott, the company's CEO for the past nine years, is stepping down. He'll be replaced by Michael Duke, , 58, who currently leads the company's international division."

"Retailers traditionally don't make such appointments right in the middle of their biggest selling season. But longtime Wal-Mart watchers see the change as more of a victory lap than a forced departure for the 59-year-old Scott, whose tenure had been marred by disappointing results and controversy until this year. "He's dealt with the public relations, the vicious union attacks, he's gotten morale back up—the best thing to do is leave at a moment of strength," says Howard Davidowitz, a retail consultant with his own firm in New York. "When you talk about management transition, this is as good as it gets."

Bill,

Thanks for the TOG call on Thursday. Here are the results:

Gold-up 53.3 to 802.20
PHLX gold/silver-up 26.71%
Gold miners- up 20.28%

One year returns in one day....AMAZING!!!

Tks

Ray

Bill,

On the bond side:

30 yr T-bond down 4 9/32
10 yr T-bond down 2 2/32

Again, nice call. I know the bull call has had its doubters....but a bottoming of the mkt is a process....it doesn't happen in one day...and isn't realized until AFTER it has happened.
Keep up your fine work here.

Ray

Question for the community:

Now that C will probably get a gov't rescue...do the naked shorters go after GS next? I mean, it has fallen about 80% from $250, but does it go to sub $10 like C/MER/MS/LEH/BS??
Is anyone making that trade?
Is there a perception that Paulson's old firm-GS-must go down for the mess he helped create???

Just throwing it out there.

Wavesmash,

re: Travelers umbrella logo

In my dealings with top management and design I found very few companies in which the CEO didn't think his sense of marketing outclassed everyone.

A couple gems:
• The brief change to the New Coke (soon corrected by adding Classic Coke)
• Macy's dumping the Marshall Fields name

My suggestion for Citigroup (not if my client)
Trash the umbrella and go to the Bucket — more relevant and meaningful to all with the bailout in progress.

Inquisitive minds want to know

Last night some one was handed a huge pile of over valued chips in citi a few moments after the closing bell. Only a computer would swallow such action and it was not only in a single stock. It is going on with several of the biggest stocks each day. I don't think it's hedge funds I believe we have seen the enemy and its us. In the final moments the violent swing on the Dow are these ETF X2 and X3 funds unloading the positions the traders have taken for the day up or down. Several days last week by volume Pro Shares were the number one security traded.

I have a 9 to 5 job so I can't watch each tick or be on the computer at the final bell. A few years back I had the privilege to follow a winning position real time from premarket to after hours for a few days. Yep that is how I spent my vacation. I remember pulling the trigger moments before 4 PM on a real time tracker to close out my position to hold my gains and to them watch it trade up seamlessly at 4:01 into after hours!

What I lost sleep over last night was when we see a giant fall there will be an inverse need at the end of the day to close the position in the new ETF's, not every time. But when the pros are wrong we should get our share.

My thought is that if we watch the violent up days the shorts will have to cover, and if you are at the trough a few moments before the volume line you can buy at market and return them to the machine a few moments later for 10%. These funds unlike traders cover each day.

We just need to know what they have to swallow.

So, gone are the Merrill bull and the Citi umbrella...who's next??
Is the next bubble in the markets gold?? time will tell...as it has just started its ascent...will take some time before it reaches bubble status....but something to ponder.
T

off-topic at Craig - how is the food at Ruth's Chris? I see them advertised a lot in the in-flight airline magazines, but never had a chance to try them; they're not very easy to find.

on-topic - holdings.

Opened position in CHK at $13.99 (stink-bid limit hit on Thursday).

Added to DB in low 20s.
Added to MOS, TRA, TSO, and AA at lower levels on Thursday.
With the exception of AA, all had reasonably good Q3 earnings, low P/Es, and generally fit the model of companies that I am looking to add. DB in fact had a P/E of around 1.45 earlier last week, with almost $11 billion in current earnings. So, I feel like I am getting a real bargain with these companies at these levels.

Refiners hit me pretty hard, as I hold VLO and TSO. I sold FTO with a small profit before it headed south to single digits. Their earnings in Q3 were not as strong, but had I not exited the position, probably would have added at $7 or $8. Prior strength in SUN weakened last week as it moved back to lower 30s after a run towards $40 at one point.

I sold NVLS and AKAM - still think these are worthwhile long-term, but short-term prospects do not look very good (to me), and both have dropped some 50% since late Sept. Not thinking tech, and semis in general, will have an easy go of it over the next 6 months, so I sold at a loss and added to the above positions.

SU has moved to what looks like a lower trading range with a 16-handle now (actually hit 15+ last week). I'd been buying this in high teens and selling in mid-20s, so it was a good swing trade for me, but now I have to re-look since it moved significantly lower last week. I know its a favorite here.

Anyway, that was my week, for what it's worth, have a good weekend all.

xdroid - I read your most recent post and the earlier post last night - interesting!

I’m not sure that I would put a lot of faith in any reasoning that is based on OpEx actions, but what you say might actually be happening on routine days as well - something to be aware of and to watch for in our trading processes.

I too have a theory that what we see daily in large part is a consequence of “big money” aggrandizing “quant” computerized hedge funds with huge assets. Because almost all these hedge funds have lost money for the year, and there is so little time left in it, almost all hedge funds have had their “quant masters” rewrite their computer buy/sell programs to gain an edge on the competition. This is not hard to do - any computer can analyze and figure ways to anticipate what another computer is doing. Thus, we get some computers anticipating possible buy points and then putting in early orders, then as we see those orders fille, we have the split second “late timer” hedge fund computers signaling a confirmed buy status, and off the Market goes with the herd of hedge lemmings until another “early” computer then signals the reverse. Huge consequences for the winning funds, and none of it is based on funnymental or news (except that some outfits like the PPT might want to set off a positive Market reaction to the appointment of one of their own for political reasons)..

The practical result (follow the money) of all this computer “gunning” of the markets is that certain pack leading hedge funds will survive by being able to advertise that their results for the year was so many percentage points “better” than other competing hedge funds. Also, each fund’s net worth is improved each day by being on the right side of the Market’s daily moves up and down while the Index based funds show only the net result for the day which lately is mostly losses..

All this is very negative. Remember when one was encouraged to buy a stock in order to own a piece of a company that was worth owning?

Just a thought.

Obama speaks this am on economy.

http://change.gov/page/s/economy

You can input your recommendation to the right of the video.

I will save my judgement until his term is over.

Dealer give me some SFK, Please

Some times we just need to know others might have made poorer trades than us.

Friday after hours seems someone rushed in to short Mondays market, purchasing ProShares UltraShort Rusl1000 for $250 a share when it closed at $150.93 for the day. A profit of
64.47% for someone and a statistic no doubt as the year high for this ticker that was to date only as high as $173.78.

Does buy and hold work for ultra shorts at the bottom?

http://tinyurl.com/668okr

What was down 20.93% ended the day up somewhere for some one. Can't play if your not in the game but who is watching the pot?

Ruth's Chris hard to find? There are 114 of them. Kaimu has 4 of them within a short plane ride. There are like 14 of them in Florida alone.

Why don't you come to New York and try Luger's or maybe the Old Homestead? Of course while you're here there are 3 Ruth's also:)

PS: A pet peeve of mine...restaurants that don't state prices on their 'net menu's.

I read this board daily but rarely post.

I thought the board would enjoy reading this daily report from Richard Russell of the Dow Theory letters. He's been writing it since 1950's
and it considered one of the best market newsletter timers from Hubert.

but there is a catch.......make sure you read the date of issue at the end

"This could be the most important piece I've written so far this year. So please read it carefully.

With rates low and staying low, with the stock market low and staying low ( low in price, not in values), the US is looking increasingly like Japan.

The great fear, as far as the Greenspan Fed is concerned, is DE-flation. Once the economy goes on the deflation path, it can get out of control -- meaning getting out of the Fed's control. The Fed is doing its part in fighting deflation. The Fed is fighting US and world deflationary forces with a massive increase in the money supply (and what else is new?).

However, for the real authority on inflation/deflation, I always turn to the bond market. No sector of the economy is more sensitive to the trend of inflation or
deflation than bonds.

Today the bellwether 10-year note is yielding 4.73%. At the same time the TIPS, the inflation adjusted 10 year T-note, is yielding 3.11%. The differential has now dropped to 1.62.A few weeks ago it was 1.78. A year ago it was 2.20. Those sophisticated characters who buy and sell bonds are saying that the trend is toward LESS inflation. Some might even be so bold as to state that the trend is deflationary.

I've been stressing the fact that this nation is up to its eyeballs in debt. The government, the states, the counties, the cities are chock full of debt. The corporations are loaded with debt. American consumers are rolling in debt and taking on more debt even as you read this report. Never has any nation in world history taken on this much debt .

It's no secret that inflation is the debtors' best friend. Inflation makes it easier for debtors to service their debt with depreciating dollars.

Conversely, deflation turns debt into a living nightmare. During deflation dollars become scarcer
and more valuable. And in the US where debt is king, a trend towards deflation could conceivably set off a debt melt-down.

A debt melt-down would be characterized by mass bankruptcies and a trend on the part of banks to be ultra-conservative. To put it another way -- deflation and a debt melt-down would be an utter disaster.

We've been watching the stock market deflate into its third year. The stock market doesn't exist in a vacuum. The stock market moves first and the economy follows. One huge danger is that the stock market could be saying "deflation ahead." And the great fear is that what's been happening in the stock market could be happening in the economy -- a month, six months, a year from how.

This has got to be Greenspan's worst nightmare. Here he is, gunning the money supply for
all its worth and he can't get the economy on the inflation path again.The culprit -- too damn much debt.

How do you get rid of debt? You pay it off (almost impossible now since it's still rising), you declare bankruptcy -- or you inflate it away It's obvious which method the Fed has chosen -- it's the method that we call -- inflation. A few years ago I gave the problem an easy three word description. I called it -- INFLATE OR DIE.

I'm sorry to have to put it right there for everyone to see, because I'm afraid that some subscriber may send it to Mr Greenspan (and who knows, Greenspan may even read my site), and if Greenie sees this simple description it's going to scare hell out of him. Not that he doesn't already know it, but to see it in print, why it's enough to cause him to lose what little hair he's got left.

So increasingly, I'm seeing this bear market as the Specter of the Death of Debt.

The bull market was all about growth and optimism and phony earnings and the phony "New
Economy" and the phony productivity and getting the price of your options up and rising price/earnings ratios.

This bear market will be all about balance sheets and crushing debt and collapsing earnings (but
at least honest collapsing earnings) and rising pessimism and declining price/earnings ratios.

I've been drawing subscribers' attentions to the shocking collapse in the utility sector, and I've been puzzling about why the utilities have been caving in. My conclusion now -- the utilities are loaded with debt. Utilities are huge issuers of bonds. I think the reason the utilities are crumbling
is that the market is fearful of their balance sheets -- TOO MUCH DEBT.

So here's my advice to subscribers -- get into as liquid position as possible. If you have a
lot of debt, try to cut it down, try to get into a no-debt position.

One big problem is going to be housing, where millions of homes are financed by mortgages. And, in case you weren't aware of it, as far as the cold eye of the market is concerned, mortgages are simply a form of DEBT.

This, by the way, is why I'm not happy about REITS, this is the reason why I'm not happy about
the way Fannie Mae and Freddie Mac are acting, this is the reason why I take the new low in the Confidence Index as a bearish omen. The Confidence Index is a barometer of credit conditions.

This is what I believe this bear market is all about. It's about the coming melt-down in debt.

And what's the most liquid form of pure intrinsic value? What the ONLY money that isn't somebody else's debt.

The answer again is a four-letter word -- GOLD.

People ask me how gold could possibly rise in a deflation. In a deflation where the viability
of anything and everything could be in question -- the desired asset is cash, money. And the only money that is free of debt is GOLD. In a debt-melt down, the dollar price of gold could "go to the moon."

By the way, I haven't heard a blessed word about a debt melt-down from CNBC, from CNN-FN, from Bloomberg, from the WSJ or from Barron's or anyplace else.

THEY DON'T HAVE A CLUE. THEY THINK THAT THIS "LOUSY MARKET" HAS TO DO WITH CORPORATE SCANDALS. GUESS AGAIN, MEDIA GUYS, IT HAS TO DO WITH THE COMING MELT-DOWN IN DEBT. HEY, YOU HEARD IT HERE FIRST.

Next, let's turn to stocks.The giant "head-and-shoulders" pattern in the Utility Average (the
pattern only shows in the monthly chart -- that's how big it is) has now smashed through support, and the utility shares are collapsing.

Then we have the S&P
Composite. Here again we have a huge "head-and-shoulders" pattern with critical support at 944. As I write the S&P has broken critical support and is selling at 920. Below this head-and-shoulders pattern is a massive vacuum, and frankly, I don't know how bad it can get, but
this S&P picture (see charts on page 6 of the last Dow Theory Letters) is as nasty a chart as any I've ever seen.

The very broad Wilshire 5000 (actually it's composed of 6,500 stocks) is also in a well defined
head-and-shoulders top. I put critical support at 9000. As I write the Wilshire is at 8897. In other words, the Wilshire has joined the other averages in violating support.

I believe the die is cast.
The first psychological phase of this great bear market is nearing its end. And with the breaking down of the S&P Composite and the Wilshire -- the second phase of the bear market has arrived.

The second phase of a bear market is usually the longest phase. The second phase sees the gradual exit of the public from the market as investors slowly turn from hopeful to frustrated to bearish. In the second phase stocks decline as they discount the worsening economic, social and political picture. In the second phase stocks go down as earnings collapse, and as bad news
fills the pages of the daily newspapers.

We've never had a bear market in which hundreds of billions of dollars worth of stocks are
held by the mutual funds. And I have to wonder what happens if or when the public turns bearish and wants to swap their mutual fund holdingfor cash. It could be quite a sight.

Anyway, for what it's worth, all the above is the way Richard Russell sees the developing picture.

TODAY'S MARKET ACTION -- My PTI was down 6 to 5241 with the moving average at 5293. The PTI remains bearish.

The Dow was down 282.59 to 8813.50. There were 7 movers in the Dow. BA down 2.42, GM 3.53 (the car boom is over), HD down 2.10, JNJ down 2.32, MMM down 4.00, MRK down
2.18, UTX down 2.70.

The Dow, I believe, is heading for its September low of 8235.

August crude was up .68 to 26.77.

Transports were down 28.73 to 2547.99.

Utilities were down a whopping 15.00 to 237.99.

There were 798 advances and 2477 declines, but no 90% down-day yet.

There were 47 new highs and 213 new lows (no panic here).

NYSE volume was 1.79 billion shares.

S&P was down 32.36 to 920.47.

Nasdaq was down 35.11 to 1346.01 on 1.81 billion shares.

My Big Money Breadth Index hit a new bear market low, down 10 to 748.

The Sept. Dollar Index was up .28 to 106.33. Sept. euro was down .40 to 98.74. Sept. yen was up .31 to 85.43.

Sept. Nikkei was down 220 to 10,590.

The rush to safety continues with the Sept. 30 year T-bond up a point to 104.25 to yield
5.36%. The Sept. 10 year T-note was up 23 ticks to 108.21 to yield .64%. The Sept. muni futures were up 21 ticks to 105.17.

I think gold acts well, and seems to be consolidating above 310. I bought a batch of Kruggies
today, paid just over 320 for them. August gold was down 1.40 at 315.10. Sept. silver was down a fraction at 5.05 (silver acting really well, stronger than gold, so far). Oct. platinum up 2.20 at 515.70. Sept. palladium up 1.85 at 327.00.

Gold/Dollar Index ratio was down 2 .77 at 295.67.

Don't forget, gold closes 3 hours before the stocks. XAU was up .31 to 78.27. HUI was up 2.99 at 139.72.

NEM up .26, PDG down .11, ABX down .34, AEM up .10, HL up .05. I continue to believe that when the funds finally start buying gold shares, their number one pick will be the world's largest producer, NEM. Everyone should have some of this blue-chip gold stock.

If we get the debt melt-down I've been talking about, T-bills and gold will be the favored items. And there's nothing wrong with holding some physical gold. My more sophisticated subscribers can buy euro futures.

McClellan Oscillator is negative at minus 116. And it looks close to breaking down again -- to new lows for the move.

STOCKS-- My Most Active Stock Index was down 11 to a new bear market low of 269.

CONCLUSION-- I think I've already said it all, but one thing sticks in my mind. Now that the S&P has broken down from that monstrous multi-month head-and-shoulders top, could we have a market crash ahead? It wouldn't surprise me. It may not happen, but listen my faithful subscribers it would not surprise me. Remember, the mutual fund public has probably stopped buying -- they've been "holding for the long haul" -- but they haven't really started to sell yet either.

I'm afraid the "long haul" could arrive in the next week or maybe the next month. Maybe the moment of truth known as the "long haul" will come when CNBC starts talking about a primary bear market. Or maybe it will come when Alan Greenspan admits in public that he hasn't got the vaguest idea whether housing is in a bubble or not.

And that's it for today from the R man. But wait, there's a bit more below.

In their biggest change in years, S&P yanked out seven foreign stocks from its flag-ship 500 and replaced them with seven US babies. Out are Royal Dutch, Unilever, Nortel, Alcan, Barrick Gold and Inco, and in are E-Bay, Electronic Arts, Goldman Sachs, Prudential Financial Group, SunGard and UPS.

Why did S&P make the changes? I honestly don't know -- maybe they wanted to make this a 100
percent All-American bear market.

I just received the St. Louis Fed weekly chart book. Here we see MZM rising at a 13.2% rate and
the Adjusted Monetary Base rising at a 9.7% rate. But the rising money supply isn't helping, because their chart shows Commercial and Industrial Loans in a downtrend and scraping the bottom. The money's there, but nobody wants to borrow."

Richard,
July 10, 2002

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

Bill you think those selling puts in July 02 would of been a good move? ;)

Best Regards

Ken

Next Friday may be one of the more important Black Friday’s to watch in years.

According to National Retail Federation’s 2008 Holiday Consumer Intentions and Actions Survey, conducted November 5-11 , 72.0 percent of consumers have completed less than 10 percent of their shopping, compared with 2.2 percent of shoppers who say they have completely finished.

“Americans may be hesitant to purchase expensive gifts this holiday season, but personal and practical gifts will resonate most with shoppers this year,” said NRF President and CEO Tracy Mulli.

Bad week for global employment...

More than 80,000 job losses were announced around the world this week as the global recession tightened its grip in virtually every business sector.

A Financial Times study of company announcements, press briefings and union statements over the past five working days reveals the spread and depth of the downturn.

Jobs have haemorrhaged from businesses as diverse as a Chicago kosher hot dog factory, a German airline and car plants in Japan. Companies have been forced into savage cost cutting as the effects of the credit crunch have sapped confidence and sent order books and commodity prices plummeting.

http://tinyurl.com/5vda2u

2nd_ave,

One of the things that changed everything for me was to use the if-then rules that Vadym speaks of. In the past, for example, I would hear a call for a rally and jump all in, and then wait, every day expecting the rally, and everyday getting crushed, and every day afraid to sell.

What I do now is watch the S&P500, one simple index, one simple strategy.

Here's what I see: on thursday we went through important support -- 770 -- the 2002 lows. I expected a big bounce after hitting that in the morning. But the price only hit 820, and then we dropped. This is a very big deal: that was major support and we barely bounced. Where are the buyers? This is a very bearish sign. On Friday, the S&P500 found support at around 740, and rallied up to 800.

Based on what I see, here are my if-then rules: If the price breaks above 820 on Monday, that would be quite bullish because it was resistance on thursday (I'll sell my 2Xshort). If the price breaks above 850, that would be very bullish (I'll buy a 2Xlong).

However, if we don't break 820 (or don't even test it), that will be very bearish. There is no rush of buying at these major support levels and I would expect a drop down to the next major support levels (Twiggs calls 6000 on the DOW). So if we break 740, I'll go all-in 2Xshort, at least for a few days.

You don't need guts to take the high probability trades; you just need a mind clear of fear so you can see. I was wrong on thursday (expected a bounce from major support), and very wrong on friday (expected a big drop -- I should have been more cautious on options expiration day), but I was right mon,tue,and wed, so am flat for the week. I don't have to be afraid of being wrong; it's part of my strategy. Take the high probability trades, understand I will be wrong, and understand and accept how much I'll lose if I'm wrong.

I'm still really astonished at how well this seems to be working. I'll recommend that book again: Trading in the Zone, by Mark Douglas. His basic idea is: first there was fundamental analysis, then technical analysis, and now there is psychological analysis. And in his view, traders that don't do the psychological analysis will never really be successful. I think Vadym could back him up on this. A life changer of a book.

FarAwayEyes-

I agree that psychological analysis works when trading, whether it's analyzing crowd behavior or my own...no argument there...

Half of my portfolio resides in a company 403(b), where trading is highly restricted...in fact, due to "excessive" trading earlier in the year, I am now restricted to one trade a quarter in each of two accounts...I complained about the bulls--- of course, but that gets me as far as arguing with the referee, who always reminds us who's in charge, so I just play the game as well as I can on their terms...I made a decision the week of October 1 to go long in both accounts, and unless I want to bet that cashing out now remains a good decision until January 2 (I don't), I have no choice but to hang in there...

The other half can be traded...and after reading your earlier post about cashing out and reversing the trade, I thought long and hard (still thinking) about trading the swings...the problem here is a day job that does not guarantee continuous access to the market...so I'm thinking more along the lines of trading horizons longer than a day...that takes me to where I am now, which is waiting for a spike to sell into; your decision to sell (if I recall correctly) was more abrupt (as was vinod's), which IMO takes guts in the sense that I would be selling on weakness, which just goes against the grain for me...I've always preferred the counter-trend position; but then, that's part of the analysis too...

in any case, the majority of my positions are in sector funds/ETFs, with a scattering of Cara 100 companies, and I can't say I would not be buying them at this point (if I were in cash, I probably would be)...sometimes ST trading is either not possible, or not necessarily what one is inclined to do (eg, there is really no way for BRK-A to day trade, but I have no doubt the fund will recover and ultimately outperform most other strategies)...

FarAwayEyes... works like charm, doesn't it. As soon as you start thinking in IF-THEN scenarios instead of "This is what WILL happen", amazing transformation happens. No more bruised ego when the market does something different from your forecasts; no more stubborn counter-market trades; no more overwhelming emotions distorting your perception. You turn into cold-blooded trading machine that executes pre-canned actions based on pre-determined criteria. Losses don't frustrate you - they are well-controlled, they are expected and they are accepted as a part of normal trading process. Profits do not make you lose your head - they are but natural reward for strict discipline. Trading is not a source of enormous frustration anymore - it's fun, it's a natural part of your balanced life, professional pride and money supply depending on the most dependable entity in the world, the one you can trust unconditionally - YOU.

Did I just describe heaven?

P.S. This is very rewarding to hear that my write-ups help. Thank you.

Kaimu,

My... you were prolific in your comments last night.. all of them good.

Your comment on the government's effort to deal with the credit crisis is right on the mark. "You can't settle debt with more debt"

Will the Japanese, Chinese and Arabs continue to purchase our debt, recycling their declining surpluses and enabling the US to continue their misguided ways?
Or will they say enough is enough!

I wouldn't be surprised if come Monday, Citibank has been taken over and is now called the Bank of Mecca.

You also said " the situation is beyond sad" ....so true. Criminal fraud has taken place...where is justice... the treasonous perpetrators must be punished or our freedom has been lost.
Fiat money is the evil and must be eliminated along with the FED, which is the purveyor of the toxic paper known as the dollar.

Mahalo, bro

Gold raise because of
Trader added long position after Thursday expiation of December gold option
And support after option expiration made short to run and force them covering their position
Even given market situation buying of this safe haven has not pickup a lot
Price may go down if financial stability shows improvement next week. And profit taking takes place
This is my opinion

Seems like Buffet (and GS) may not get out of this one so easily:

"Investors are concerned about a $37-billion bet that Buffett made last year that U.S. and world equity values would be higher in 15 to 20 years than they were then, when the Dow Jones Industrials were trading around 13,000. Through his firm, Berkshire Hathaway, Buffett sold option contracts, known as "naked puts" to an undisclosed group of investors for around $4.85 billion, reportedly using Goldman as broker."

"... due to accounting rules, this has made Buffett already need to mark down a $6.7 billion loss on the trade even though the trade has another 14 years to work out.

Because of its solid-gold credit rating, Berkshire Hathaway was not required to put up collateral to make this trade. But now rumors are flying on Wall Street that the owners of the contracts have demanded that broker Goldman Sachs put up collateral for the rest of the amount due. Since the value of the trade could be enormous, the collateral demands are said to be very large, and fears that Goldman will struggle to make good on its obligation has panicked shareholders.

Indeed one theory making the rounds this week is that Buffett put $5 billion into Goldman at around $125 per share in September not as an investment but to help provide funds for the collateral."

http://tinyurl.com/5g2zq8

2nd
My son started his new Job at Partners Healthcare.
And here is new type of retirement plan just like 401K or whatever
Look like this might be in future for us
Cash balance retirement plan
“Under new cash balance program, there are no investment choices you need to make. Partner will automatically credit your new account with annual interest. Your account will earn guaranteed interest equal to one year U.S. Treasury bill rate, plus 1%. The rate may change eachyear, but will not be less than 5% or more than 12%
Your cash balance benefits are not at risk or subject to the up and down of the markets. And in today’s financial environment. That can be a welcome relief.
My feeling is what Wall Street did to people’s 401k/retirement plan/ORA is going to bite them hard. This might be death of mutual fund?

corection
---relief"
--plan/IRA

JIM
There is posibility that because of what you mention about put option. Buffet may lose AAA rating. which might rattle the market

vinod- that plans sounds interesting, and similar to one my company offers...the retirement plan here is two-pronged: (a) the company contributes 5% of my annual gross into an account that is guaranteed to grow at 6% per annum, and (b) it also matches up to 3% of my annual gross in a separate account (as long as I contribute a sufficient amount, of course, but I always max out my contributions, so it hasn't been a problem)...until september 26th, the matching account was the outperformer...now i'm sure it's the guaranteed growth account...;

I have a couple of stock certificates from 1929 that are interesting collectors items.

For a "limited time", you can get the annual reports for Citi for free.

http://www.citigroup.com/citi/fin/

The 2005 one even has the umbrella in it, and not the upside-down rain catcher.

Was tempted to buy Citi Friday but I have had enough of catching knives for a bit.

http://tinyurl.com/64rk3v
"APEC Leaders Promise `Extraordinary' Steps in Crisis "

OOOps

Teck Announces Resignation of Chief Operating Officer

Nov 21, 2008

Vancouver - Teck Cominco Limited (TSX: TCK.A and TCK.B, NYSE: TCK) announced today that Executive Vice President and Chief Operating Officer, Peter Kukielski, will be leaving Teck to pursue a new opportunity . . . .

2nd
their plan has partners contibute 1% of the pay pluse 1 week of salary pluse 700
regardless of your contribution.this will satisfy all different salary level

2nd_ave,

I have a day job as well, and was traveling last week so for the first time since I changed my approach, I wasn't able to gawk at the screen every few minutes. I found this was an improvement: I was forced to pick a trade that was likely to work for a few days (TWM, DTO), and forced to pick a sensible position size. It worked well because I didn't get a chance to second guess myself, and didn't get whipsawed out by the intra-day gyrations.

I'm still new to this and am still working on where the sweet spot is for me in terms of position size and timeframe. Next week, if we break below 740, I'll hold 2xshorts down to some level of support (650?), or until I'm proved wrong and we break out above 740. That's a wide enough range that I should be able to just check on it a few times a day. Not saying I won't check more often, but that's my goal.

I have Jesse Livermore's quote taped to my screen: "I can't tell you how it came to take me so long to learn that instead of placing piking bets on what the next few quotes were going to be, my game was to anticipate what was going to happen in a big way."

I understand about the 403(b): that kind of restriction increases the complexity of everything: one more dimension to factor in. I'm trading with my IRA and a regular account, but also have a 401K that's been in cash since January (except a brief stint in the market in september where I lost 10% before I got it back out again). I'm currently looking into borrowing from my 401K so I can trade with it free of the restrictions.

vadym,

When I first read one of your posts about the if-then rules, I was too green to know what you meant, but I kept it in my mind because it seemed important. As I lost money, I kept asking myself: what's the best course of action to take given the market is fundamentally unpredictable?

The answer is to deal in probabilities because while the market is not exactly predictable, it is statistically predictable. And that's where your if-then rules come in: if X happens, then there's a high probability that Y will happen. It may not happen -- oh, well. I lose that one. But statistically over time I win.

As you say, totally amazing transformation. Thanks.

Kaimu,

Further to your comments on ASX based miners I've added an item of interest from the local rag. Personally I think you will make bucket loads out of your strategy, probably 50:50 between stocks and currency gains. I'm heavy into ASX miners but don't have your currency payoff.

Pressure on small miners as big rivals face cuts
Advertisement
Sydney Morning Herald November 22, 2008

"IN an environment where big iron ore miners such as BHP Billiton, Rio Tinto and Fortescue Metals are facing shipment and production cuts, their smaller rivals are doing it even tougher.

Murchison Metals, which sells iron ore from its Jack Hills project to China and Korea, yesterday said customers were demanding flexibility on delivery schedules and pricing.

"Precisely how this will impact on … export tonnages is unclear," the miner said at its annual meeting in Perth. "At this stage [Murchison] hasn't had any requests from customers to terminate contracts."

Mount Gibson Iron last month revealed some of its customers had reneged on contracts and it was forced to agree to sell its ore at $US40 ($63) a tonne to an associate of a major Chinese shareholder for the remainder of the year.

The likes of Atlas Iron and Territory Resources, which did not sign long-term contracts before the spot iron ore price plunged, are facing even more difficulties.

Atlas has found a buyer for its first low-grade shipment, but has yet to finalise a longer-term offtake agreement.

Territory's chairman, Andrew Simpson, yesterday told shareholders his company would attempt to sign three-year benchmark-linked contracts during a visit to China next month, to replace its reliance on spot sales.

Territory is under particular pressure as a high-cost iron ore producer, with production costs of about $65 a tonne versus the spot price of iron ore fines of its grade selling for less than $US55 a tonne.

Unlike other miners, which have seen the lower Australian dollar compensate for some of the effects of lower US dollar iron ore prices, Territory has hedged its currency through August next year at out-of-the-money rates.

As a larger producer with long-term contracts, Fortescue is facing less immediate pressure. The Herald estimates it earned about $290 million in the September quarter based on revised estimates stripping out the negative interest and tax effects of a book revaluation to a $US100 million note held by Leucadia National.

Fortescue shares rocketed 40 per cent, to close 51c higher at $1.80.

But analysts have warned the miner's decision to charter ships when rates were $US50 a tonne versus $US4 a tonne today could have an impact on profits this year as customers refuse to pay the higher rates.

Meanwhile, to the anger of smaller miners, BHP is believed to be selling iron ore on the spot market at $US48 a tonne excluding freight in an effort to avoid production cuts."

2nd_ave said: "your decision to sell (if I recall correctly) was more abrupt (as was vinod's), which IMO takes guts in the sense that I would be selling on weakness, which just goes against the grain for me"

You're correct that my decision to sell was abrupt and I never thought of it but I suppose it did take guts. It was a blind leap of faith: it felt a bit like jumping off a cliff, trusting there would be a net below. The "net" was the new strategy. I sold after heavy losses, trusting that the probabilistic approach would work.

In my old approach, "selling on weakness" was something that hurt, but I do it all the time now: I call it selling losers, and perhaps I'll be proved wrong to sell, but the key thing is, I don't care. I have complete faith that as long as I take what I believe to be the high probability action, I'll come out okay.

So, anyway, I guess the point is that while it may look gutsy to take the leap and sell, behind the scenes there is first the placement of the safety net.

2nd, you're one of the nicest people on this blog and I wish you luck in your decisions. fwiw, I'm watching S&P500 740, but according to some, the last support is 720. If we go through that, look out below all the way to 400, with a timeframe of about 3-4 months. It might be prudent to consider a single if-then rule on that last ditch support. Perhaps a break of support will not turn out to be disastrous, but it seems the most probable outcome, and trading on that outcome, right or wrong, is the best we can ever really do.

FarAwayEyes/Vad-

yes, probabilities...it's no coincidence that what you learn in Vegas carry over to Wall Street, and vice versa...

what is the probability of a winning bet playing against the crowd? with the crowd? why do crowded trades tend to fail? what is the probability of a winning bet if buying on weakness? buying on strength? how many variables and contingencies come into play?

is it possible that both of you stumbled onto the one strategy that fits your perspectives/personalities? we all have our own preferences, and it's always easier when we play to our strengths...

you know, i appreciate Coltrane's music from an intellectual POV, but I don't really enjoy listening to him that much; i prefer the endlessly creative ways Joni Mitchell spun simple major and minor chords in her early albums with far greater emotional effect...i'll take an afternoon in one of the redwood groves near mendocino over the beach in hawaii any day...

on the other hand, my moods can change my preferences (as well as the strengths i play to) at any time...which probably explains the differing horizons i find myself trading from time to time...

i like rules most of the time, as they are after all distillations of the wisdom of all who came before us...just wondering if there may be more than one set of rules, even whether any one set of (mostly successful) rules inevitably fails at some point (or beyond some point)-> why is it that black boxes do so poorly: selecting investing legends at random, what caused Julian Robertson, LTCM, or even Jesse Livermore to ultimately fail? might you follow one set of rules to the letter only to inadvertently trip over even loftier rules?

there's more to life than one set of rules, one set of goals, and (perhaps with the exception of religion) one way...

make that carrIES over to Wall Street...

2nd: Livermore probably failed because he pushed too far for too long.

Old Saying

Stretch (a bow) to the very full, and you will wish you had stopped in time.

Temper a sword-ege to its very sharpest, and the edge will not last long.

When gold an jade fill your hall, you will not be able to keep them safe

To be proud with wealth and honor is to sow the seeds of one's own downfall.

Retire when your work is done, such is Heaven's way.

Livermore was always going for the home run; Bill goes for the singles and doubles and still picks up the 4 baggers.

Somali Pirates in Discussions to Acquire Citigroup

By Andreas Hippin
November 20 (Bloomberg) -- The Somali pirates, renegade Somalis known for hijacking ships for ransom in the Gulf of Aden, are negotiating a purchase of Citigroup.

The pirates would buy Citigroup with new debt and their existing cash stockpiles, earned most recently from hijacking numerous ships, including most recently a $200 million Saudi Arabian oil tanker. The Somali pirates are offering up to $0.10 per share for Citigroup, pirate spokesman Sugule Ali said earlier today. The negotiations have entered the final stage, Ali said.

"You may not like our price, but we are not in the business of paying for things. Be happy we are in the mood to
offer the shareholders anything," said Ali.

The pirates will finance part of the purchase by selling new Pirate Ransom Backed Securities. The PRBS's are backed by the cash flows from future ransom payments from hijackings in the Gulf of Aden. Moody's and S&P have already issued their top investment grade ratings for the PRBS's.

Head pirate, Ubu Kalid Shandu, said: "We need a bank so that we have a place to keep all of our ransom money. Thankfully, the dislocations in the capital markets has allowed us to purchase Citigroup
at an attractive valuation and to take advantage of TARP capital to grow the business even faster."

Shandu added, "We don't call ourselves pirates. We are coastguards and this will just allow us to guard our coasts better."

*CITI IN TALKS WITH SOMALI PIRATES FOR POSSIBLE CAPITAL INFUSION

*WILL REQUIRE ALL CITI EMPLOYEES TO WEAR PATCH OVER ONE EYE

*SOMALIAN PIRATES APPLY TO BECOME BANK TO ACCESS TARP

*PAULSON: TARP PIRATE EQUITY IS AN `INVESTMENT,' WILL PAY OFF

*KASHKARI SAYS `SOMALI PIRATES ARE 'FUNDAMENTALLY SOUND' '

*Moody's upgrade Somali Pirates to AAA

*HUD SAYS SOMALI DHOW FORECLOSURE PROGRAM HAD `VERY LOW' PARTICPATION

*SOMALI PIRATES IN DISCUSSION TO ACQUIRE CITIBANK

*FED OFFICIALS: AGGRESSIVE EASING WOULD CUT SOMALI PIRATE RISK

* FED AGREED OCT. 29 TO TAKE `WHATEVER STEPS' NEEDED FOR SOMALI PIRATES

skylane - is this an LBO deal with GS as advisors to the issue? And is Joe 6P allowed to participate in the later public issue of C stock (which GS will promote as deal of the century)?

When I buy ETFs, i get a 1000 page + prospectus in the snail mail, feel bad to have felled a few trees, is there any way to stop these guys from sending me the prospectus.

Far Away Eyes: I am glad you have a trading strategy. It seems to make you confident And being a good trader is about confidence.Congratulations.

Now I want to talk about SUPPORT and SUPPORT levels.
There has been much discussion about the next support levels and many guys on this sight have drawn there lines and come up with all these arbitrary numbers from 5, 10 20 years ago and coming up with support levels. I just laugh and shake my head. In my mind the last support level was S+P at 1290 or 1240. The trouble with this market is there is no support. Not 720 not 400. We broke it some where in the 1200s and went straight down. Look at a 5 year s+P chart. The only support line that I see is Ultimate Support at 0. I am not saying we are going to zero or we have not reached the bottom yet, but I think we need some consolidation and retests before we can even think of calling any number support. Basically the market is like a weightless buoy drifting in a hurricane and wont find support until it hits against a dock a couple of times.

I wonder if Obama's arm still hurts...

ALOHA !!

AHHH ... the good old days!! What ever happened to $40bil budget deficits and debt ceilings that only went up $50bil? All $50bil buys you now is a few months solvency for GM!

READ ON:
In 1971, Republican President Nixon appointed the then Democrat Connally as Treasury Secretary. Connally that year famously told a delegation of Europeans worried about exchange rate fluctuations that the dollar is "our currency, but your problem."

Secretary Connally defended a $50 billon increase in the debt ceiling and a $35 to $40 billion budget deficit as an essential "fiscal stimulus" at a time when five million Americans were unemployed. He unveiled Nixon's program of raising the price of gold and formally devaluing the dollar—finally leaving the old gold standard.END

Was it really NIXON'S program? Somehow I doubt that Nixon could even spell the words "fractional reserve" much less know what it means.

What I have noticed about every US President is that they are experts at only one thing ... GETTING ELECTED! Its all GREEK after that!

Ahola Kaimu!

I really appreciate your posts...makes me feel like an optimist.

vadym, farawayeyes,

I've been reading your comments about "if-then".

I guess I have always considered that when in vesting due to the fact that I think that way about everything. As a designer, it is necessary to have an active imagination. What if? is something I have just always lived with.

I recall as a youngster sitting in church and listening to the preacher talking about Christianity and thinking, "Well, if I were born in Asia I would be listening to someone else taking about some totally other religion." Later, when dating, I considered "what if?" in regard to each girl. When I started my first business at age 19..."what if?". In deciding to raise a family — "what if".

In reading your comments I've been reminded of how many people must never consider this question. I seem to have forgotten the many times the "obvious solution" I proposed as a solution to a clients design problem were surprising to their management.

I'd especially like to see "WHAT IF?" in very large letters in front of congress and carved into the table top in every corporate board room. Think "what if" this had ben asked pre-Viet Nam and Iraq, ARMs and Tranches, the Hummer and other recent auto fiascos...

What if "WHAT IF?" were an addendum to the Presidential Seal?

How right you are!

2nd_ave,

Following rules:

Friday I happened to have the sound on (unusual for me) when Sue Herrera of CNBC said to a guest fund manager, "What are people supposed to do when they've followed all the rules, buy and hold, diversification... and nothing is working?"

I've often wondered if these talking heads are true believers or just shills — I guess in her case — she a true disciple.

Recent changes made at the Shanghai Gold Exchange should greatly increase gold demand...

Individual investors were allowed to buy and sell Au99.95-category gold as of Friday at the Shanghai Gold Exchange (SGE), the Shanghai Securities News reported.

In a notice issued on Thursday, the SGE said from Friday it would allow individual traders to buy and sell Au99.95, the type of gold used in the manufacturing of ornamental items. It also said Chinese commercial banks were free to decide the date to start individual gold investment services.

Wang Ruilei, a Shanghai-based analyst, considered the SGE's decision as a breakthrough since it was the first time the exchange allowed individual investors to participate in the spot transaction of real gold.

SGE, the country's first such exchange which was set up in October of 2001, began free trade in gold one year later but it served only institutional investors.

http://tinyurl.com/5qmxt9

http://tinyurl.com/5773hk

Point-and-figure charts...
and a video where James Cramer misses by more than a mile; maybe this is the worst call ever.

Off Topic: Ruth's Chris. The food, depending on location is very good. The menu used to be more Ala Carte, still is for Steaks/Filets and sides. The Filet was $36 and lamb chops $39.
They have a pretty good seafood selection, at least in Woodland Hills (Seattle is a no brainer there) with a few decent combinations, which gets you into the main course but you still order vegies/salad ala carte. I had the filet ($36), grilled asparagus ($8), a salad ($8) and a couple drinks (who knows?). The Kobe strip was $66.
In terms of price range it is expensive for an average person but mid-level for some well-heeled Caraistas. :>). We had four people and it was about $300 for the night. I don't think that's too bad.
They broil at 1800 degrees F (yes you read that right) and they are served on 500F plates.

"What if".

The perfect 'what if' training device is a little game called Chess. I learned what if in elementary school when I learned to play chess.

Autos: I wrote last week about import cars backing up at our ports. Here's the latest wrinkle and a possible trading op.

Upon returning my Advantage Rent a car on Saturday, I was met by two auto transport trucks semi-blocking the return driveway to the rental location at Bob Hope/Burbank Airport. They were picking up all of the cars because Advantage is in dire straits. The bus driver said they were warning of hour reductions but he thought there would be outright layoffs and that his friends that worked at the other major rental agencies had heard the same. Advantage is privately owned, but I suspect there are some publically traded that will be going to zero in the near future.

Not at all a good thing for the auto companies who rely on rental sales as a major part of their business. Maybe a good thing for shorting with a buy to cover at about .01.

Ruth's Chris - I will give that a try someday (German beef is not so great);
Peter Luger's - hmmm, its in Brooklyn (and Williamsburgh at that - interesting; I'm an ex-New Yorker).

And as I have traveled/worked in all of the following places these past 4 years: Abuja, Nigeria; Bamako, Mali; Dhaka, Bangladesh; Karachi, Pakistan,

I'd like to say that Americans (and Canadians, tho' I'm not sure when their Thanksgiving is) still have plenty to be thankful for this coming Thursday...

Local paper has an article about reposes car for nonpayment.
These cars go to a place where they auction them off to wholesale dealer.
This auction is now canceled, reason is dealer cannot get financing to buy these are from banks that auctioning it off.
May be after House they may have to lower car payment or write of some loan and let people keep the car. Repo. May not be worth it.

didn't we all grow up believing banks were the safest places for our money?

i think for a long time they were..then they started hiring Boomers...(just kidding, alright)-

from a purely personal perspective, my thoughts on what happened to my generation (we probably all have one or two classmates who made the pilgrimage to Wall Street)-

when the MBA degree started to gain traction with Boomers in the eighties (following the demise of the MA and the MSW), the top tier turned away from "literature, science, and the arts" (to borrow a phrase from the University of Michigan) and began applying their (considerable) talents to the end of maximizing profits...

i flew to Vegas for the first time in the early nineties for a company conference, and stopped to watch the crowd at a craps table...the progression is predictable: it's a fast game, and one starts playing the pass line with odds, where the probability of winning is highest-> one quickly learns to navigate the entire board, and before you know it, there are bets riding on every roll...at some point, the original bet is almost meaningless, as it's possible to treat almost every roll of the dice as a come out roll and to stack chips behind those as well...Vegas is smarter than Wall Street, but if it were possible, even more sophisticated contracts could be written on nothing more than the outcome of the next roll...

so let's say Joe MBA (a smart guy, naturally) lands a job with a broker, goes through the training program, and starts trading (Forex, bonds, futures, whatever)...he gets his feet wet on the pass line with odds, and before you know it, he's learned to navigate the entire universe of bets created up to that point in time...well, i don't think he's going to stop there...he wants to make himself look good to his boss, he wants to blow away his competition, impress his colleagues, rise to the top of his profession-> the culture encourages innovative risk-taking in the name of profits, and after a few 'generations' of derivatives he finds himself setting odds on top of odds for any number of possible events in his universe, and he's receiving and paying off bets on hundreds of products that bear his stamp...human nature being what it is, at some point someone is going to screw up, and someone fails to pay off...they deal with this certainty every day on the streets of Philadelphia and Chicago; in the staid environment of Wall Street they just walk away and let you take the hit-> at some point, however, the hit becomes big enough to cause real problems, but hey, for the most part it's Other People's Money; so let them handle it..

you could say we never gave them the right to play with our money this way...but we weren't complaining when the money was rolling in, when traffic jams meant jamming newly-leased Lexus/BMW/Mercedes vehicles together outside the clubs, half of them driven by realtors...it's a little late in the game to complain; i think we assist in mopping it up, and institute changes that will, for at least for another generation, keep things fairly clean...but i guarantee human nature takes over again at some point...

Bill, Congrats on your TOG call

PS: Can you tell us what is was that got you to make the TOG call on gold on thursday am?

beef- a list of great restaurants (not necessarily expensive) would make a nice side-bar to the blog...

the house of prime rib on Van Ness is a decent place for the basics; you can order a 26 ounce (entirely rare) cut right off the carving stations they wheel to your table...Asian beef- anyone who hasn't tried either Japanese Kobe or Korean kalbi (short ribs) should do so at least once...as usual, the best finds are away from the tourist traps- Brothers (either No.1 or No. 2) near Geary and 6th in the Richmond District has been packed every night that I've driven by it in the ten years since I was introduced to it...

ALOHA !!

2nd ... Good story mate! Its all definitely riding on human nature and none of that has changed since we were living in caves! HUMAN NATURE is what our monetary system is based on ...

In your analogy to Las Vegas you left out one important factor ... THE CHIPS ... BABY!! THE CHIPS!!!

The VEGAS casinos can print up as many chips as you have money to buy! A VEGAS chip can be printed into infinity as long as they have some plastic and paint! A VEGAS chip only has value as long as the CASINO is in business.

America has been converted into ONE BIG CASINO! I always laugh inside when I hear people tell me that the stock market is like a CASINO and they are going to stick to real estate or cash where its safe! Well, one of my big real estate friends who was the youngest broker in California, he got his brokers license back in 1973 at age 18 called me up and asked me for a loan three days ago. It turns out he was "gambling" in Southern California real estate, but he didn't flip one single house, he just wrote honest loans, no subprime. This is why you never BAILOUT failures, you just lower the gene pool by keeping losers in the game! Next thing you know we have IDIOCRACY!! Problem is we have the losers in Washington DC, judging the merits of the losers of WALL STREET, so are losers going to abandon losers? Do good doctors blow the whistle on bad doctors? Imagine what medicine in the USA would look like if we BAILED OUT failed doctors. A bad doctor gets a lawsuit and goes BK and he loses his license and never practices medicine in the USA again. Why isn't that the case for bad US banks and lousy US auto companies? Why keep constantly diluting the gene pool? Because losers will always support and defend losers and that's what the US GOVERNMENT and WALL STREET have become ... DC is WALL STREET now! We are our monetary system ... FRAUD!

How many of my friends told me they would never get back into the stock market after the TECH BUBBLE burst ... They then proceeded to buy and trade real estate because real estate has no risk!! No lying CEOs, no complicated financials, no charts to decipher, no shorts, no offshore shell companies, no LBO con jobs, no dilution ... HA!! Well, WALL STREET fixed that eh? I told them I was going into precious metals after the TECH BUBBLE burst. They all failed to realize that even though real estate is a hard asset and is tangible it still has "liabilities" attached and can be illiquid.

Without FIAT none of this GAMBLING, including the VEGAS type could have occurred. Our money supply would have been strictly limited by our reserves and what our productivity could support. Instead, now even a Social Security check is GAMBLING! Look at the counterparty ... Everything we do now days is GAMBLING and RISK! Those who retired twenty years ago and did nothing but leave their money in a CD are now sweating like everyone else wondering if they have enough to survive and will their bank and the FDIC be solvent. As we were lead to believe in the past we all thought that when we put our money in a savings account it just stayed in our local community at our bank, there to finance loans to local business and local real estate. Now those local savings are being "swept" into globalized GAMBLING, because there are no more local banks, regional banks. Due to FIAT and the wisdom of the US CONgress the rules were changed back in 1999(Clinton era) so that large NYC investment banks could take over regional banks and give even a farmer in Kansas the ability to roll the dice in CDO and MBS ... Roll the dice we did!!! This realization really kicked in for me when my parents sent me a check not with their usual Texas Commerce Bank, but CHASE MANHATTAN ... I phoned them up and asked them why they decided to move their funds to a BIG NYC conjob bank? They said ... "We didn't move our money our bank was bought by CHASE!!" Then not long after that I read that JP MORGAN took over CHASE. Then I sent them a list of the 25 largest US BANKS with the biggest exposure to derivatives and at the top of that list was JP MORGAN and then CITIBANK, in fact all their banks were on the list, including WELLS FARGO and BANK AMERICA, but TEXAS COMMERCE BANK would not have been on that list. So, is BIGGER BETTER? What saved HAWAII was when BANK AMERICA left Hawaii back in the 1990s. I am convinced the BIG BANKS did not see Hawaii as a fertile ground when BAC pulled out, so regional banks like BANK OF HAWAII have survived and fared better.

So now just like CHASE MANHATTAN bought out TEXAS COMMERCE BANK and JP MORGAN bought CHASE, GOLDMAN SACHS has bought out the US TREASURY ... As I have said all along we need a new Constitutional Amendment separating STATE and BANKS, like we have one separating STATE and CHURCH!

A FIAT MONETARY SYSTEM means we ALL GAMBLE!

ITS THE CHIPS STUPID !!!

Bill,

re: WIR 11-23-08

In the past you have invited a discussion of your weekly review, so with that in mind, there were a couple of points which bothered me.

I don't think we should look at what is a major change in the U.S. economy as an "overnight" one. As you pointed out in the second paragraph you warned about it two years ago. Also, CDS are only one aspect of the deterioration of the U.S. economy. Perhaps the most urgent issue, due to the 70% dependency on consumer spending, is the loss of jobs.

This has also been occurring for years, even decades, but because of the auto industry getting so much attention in the media, these 3 million (or more) jobs overshadow those which have gone before with the complete blessing of government — and the management of the auto industry.

Our city has lost more than 10,000 manufacturing jobs since the passing of NAFTA. The trickle down effect of these losses has destroyed thousands more here. We were once labeled "The Screw Capital of the World." Our factories were major suppliers to the auto industry, the military and nearly everyone who used to make "things" here in this country. We were a furniture center, a machine tool producer and several other categories provide well paying jobs to a wide range of people both white and blue collar.

It first began to disintegrate in the mid-1980s when outsourcing went to Asia for some of the simpler items. The end of the Cold War took many of the military jobs and the computerization of the world made national and client loyalty a part of history.

I began to see it in my illustration and design business as my bread and butter work was taken over by the bosses' secretaries. As PageMaker, Power point, Photoshop, stock photos and art on a disk became universal, company publications disappeared from my list of projects. Mine was only one of a long list of jobs the computer made obsolete or less rewarding monetarily.

With the spreading of internet usage whole categories of previously local jobs went to the lowest bidders in the modern world. One of my sons who followed in my footsteps is now earning one-third as much as he did in the early 1990s before his graphics studio went belly up. The other son with a degree in statistics and more than 20 years experience is in imminent danger of losing his job to India — where many back office banking and insurance jobs have already gone.

Each of these events has added to a deflationary process. Call it economic or financial or whatever....too many people want too few jobs. For want of ability or desire, too many products are finding no buyers.

All this leads to another point in today's WIR — "...there will be no depression." In my view depression is a purely economic condition and is becoming more evident. Since there is no simple, accepted definition and no politician wants his name attached, we are going to be a while admitting one is here. The conditions I have outlined seem to point to a possible depression. It may just be too soon to make that call.

Take my word for it — when you lose your job, your benefits, and dip into your retirement early — it is definitely depressing. I know people who have been working multiple part time jobs, shouldering the cost of health care, and the vacation is the time between jobs and spent looking for one. I have a list of 59 friends and relatives who fit this description. I know of no one whose replacement job is better overall than the one he lost.

You pointed out a few weeks ago that even during the 1930s there were bullish market periods in the midst of the Great Depression. It will likely be so again.

Some of us are fully aware of what the term reflation means. And it is apparent Bernanke will continue to do his best to reflate, but...

What if no one wants our debt at any rate of interest? With the dollar becoming a dirty word globally, why should anyone buy? More importantly, what if they can't buy due to domestic conditions? I suspect banks are not loaning not because they don't want to, rather because knowing (or perhaps not sure) how much exposure they have to the subprime in all its toxicity, they are functionally insolvent.

Individuals are being faced with personal indebtedness to that same point. When they cannot buy — our economy is dead. How does printing more Monopoly money make things alright in any way? Unless and until we make something here, that they want there, passing paper seems meaningless.

how about zero real estate tax and zero cap gains tax for the next 10 yrs? that should spur some growth?

Grym - Depression - "Since there is no simple, accepted definition"

My simple definition is a prolonged deflationary period. We've been discussing deflation quite a bit here lately, and one still could argue if it's been actual deflationary, or only a disinflationary economy up to this point?

It sounds like Obama has some grand plans in mind, perhaps Detroit will find work in brand new fields of manufacturing within months?

loannetter - Reverse mortgage - Actually, my reference was to alternatives Hank Paulson (Treas Sec.) and Sheila Bair (chairperson of FDIC) might consider, in parallel with only Hanks stalled? "Plan".

Why is it every action in government seems like a serialized strategy instead of parallel?

Anyway, Reverse Mortgages - A fascinating subject for quite a few whom are probably trying desperately to comprehend and would greatly appreciate a perspective from an industry professional such as yourself. If it's not too far off subject, I'm sure a brief outlook would be embraced.

Grym-

there was a film out of China several years ago, with a story line that unfolded against the backdrop of the Cultural Revolution...one (incidental) scene showed a woman on a gurney, with hapless 'doctors' unable to stop the bleeding from a complicated delivery...Mao's genius was in recognizing the power of the people and inspiring them to overthrow the overlords and fiefdoms that divided the country, but he should have stopped there...true genius would have stepped down and ceded control to minds better suited to rule; instead he was blinded by power and adoration, and (at least in my mind) left a legacy of destruction and despair...the upheaval of the Cultural Revolution probably eclipses Hitler's Germany and Milosevic's Bosnia for crimes committed against one's own citizenry...

apologies for going off on a tangent-> the point is, there is no substitute for education and experience...if the US is to create jobs that cannot be outsourced, then we should be focusing on those that require expertise that is not easily duplicated...if i'm sitting in a jail cell, i want a competent attorney...in the operating room, i want a competent surgeon...in the classroom, a competent teacher...for any number of problems, competent advice from someone with years of experience...

i also CP's idea of retooling plants for infrastructure projects...we're way past joking about our highways/bridges/waterways...are we going to be importing labor to design and build them- probably not...

technology and free trade have been great equalizers in the global economy, but an even greater equalizer is education and the accumulated experience of workers in this country...i'd hate to see us lose that edge..

time to add some value

Clip from

Mauldin's weekly letter...

"Deflation and Helicopters: Time for a Review

I wrote six years ago (November 2002) about Ben Bernanke's speech on deflation, where he tried to make a joke about beating back deflation by dropping money from helicopters. He was immediately tagged as "Helicopter Ben." My thoughts on that speech took up about half of one chapter in Bull's Eye Investing, and I still think it is a very important speech.

I have been saying for a long time that we would be dealing with deflation next year, and that has been met with a lot of reader skepticism. And when inflation hit 5.6% last July, that skepticism was understandable. But this would be a strange world indeed if you had the twin bubbles of housing and credit burst and didn't see a whiff of deflation. Recessions and the bursting of bubbles are by definition deflationary.

And I have been giving thought to the idea that we may have seen a mini-bubble in the price of many commodities, and that bubble has been bursting as well. And since commodity prices were the main cause of inflation, as they retreat the rise in the inflation rate is retreating. This week the latest inflation numbers showed a drop to 3.7% on a year-over-year basis.

But the Consumer Price Index (CPI) fell by a full 1% in October. You have to go back to the 1930s to find a one-month drop as large. And I don't think this is just a one-month anomaly caused by falling energy prices. The housing component, which is 32% of the index, is based on Owners' Equivalent Rents (OER). As I have written elsewhere, over very long periods of time this works as well as actual housing prices. You simply have to pick your basis for comparison and stick with it.

If, for instance, we had been using house prices for the last ten years, we would have seen large increases in inflation up until a year ago, and since then the index would have been in outright (and serious) deflation. But we use OER, so prices in the CPI have been more stable. But that looks like it could be changing.

OER has been rising steadily over the last decade as rents went up. The index showed a 3% rise in 2007, for instance. The recent trend has been down from there, and last month there was no rise in the cost of shelter. Given the number of houses for sale and a weakened economy, I think it is likely we will see outright reductions in the cost of rent, which will translate into a much lower inflation number.

Lower prices are a two-way street. When they result from improved productivity and efficiency, that is considered to be a good thing. But when they are the result of lower demand, that can be problematic.

There is the likelihood that the Fed will lower rates to 50 basis points, and some major and very seasoned economists are now predicting a zero percent Fed funds rate early next year. Given that Fed funds are actually trading at 38 basis points, a drop to 50 basis points would change nothing on a practical level. (Can we say Japan?)

With that in mind, let's revisit Bernanke's speech. Every central banker is mindful of Japan and the 1930s in the US. Deflation is something that will not be allowed. But what if the Fed lowers interest rates to zero and demand does not pick up, along with a little inflation? Quoting Ben:

"To stimulate aggregate spending when short-term interest rates have reached zero, the Fed must expand the scale of its asset purchases or, possibly, expand the menu of assets that it buys. Alternatively, the Fed could find other ways of injecting money into the system -- for example, by making low-interest-rate loans to banks or cooperating with the fiscal authorities. Each method of adding money to the economy has advantages and drawbacks, both technical and economic. One important concern in practice is that calibrating the economic effects of nonstandard means of injecting money may be difficult, given our relative lack of experience with such policies. Thus, as I have stressed already, prevention of deflation remains preferable to having to cure it. If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation."

Just a thought here. We could see real drops in the CPI next year. We could also see a US government deficit approach $1 trillion and go right on through that heretofore unthinkable number. As I wrote last week, a reduced trade deficit means that there will be fewer dollars abroad to buy our debt. The difference will have to be made up by either increased savings in the US or higher rates to attract buyers OR the Fed monetizing the debt.

I think the Fed would be highly reluctant to monetize debt in a period of inflation like we have been in, no matter what problems we face. But in a period where we could be facing deflation? It is very possible they would consider monetizing the debt, as will central banks all over the world.

We are in unprecedented times. A (1) deep recession coupled with (2) financial institutions deleveraging, added to (3) a consumer who is going to be forced to save more and spend less while (4) commodity prices are falling, on top of (5) a serious slowdown in the velocity of money, and you have the makings of a perfect deflationary storm. The Fed would be forced to fight it.

What would they do if lowering the Fed rate to zero was not enough? As Bernanke stated, they would simply set the rates for 1- and 2-year notes and further out the curve if they felt they needed to. And if Goldman Sachs is right in its latest revised forecast, the economy is going to need some help:

"Goldman said it now expects U.S. GDP to fall 5 percent in the current quarter, with unemployment rate reaching 9 percent in the fourth quarter of 2009. It also forecast the 10-year yield to fall to 2.75 percent by the end of the first quarter of 2009, as compared to previously estimated 3.5 percent.

" 'The combination of weaker real activity and slower inflation means that profits of U.S. companies will fall even more sharply than we had previously expected,' Goldman said in a note to clients. Goldman now sees economic profits falling 25 percent in 2009 on an annual average basis, the biggest drop since 1938. It had earlier expected a fall of 20 percent. Goldman expects unemployment rates to further go up in 2010 as well, as there is little chance of the economy returning to trend growth by that year."

Other mainstream economists think GDP might fall this quarter by as much as 5%. That does not bode well for retails sales this Christmas."

At this point I have only a couple of primary (unanswered) questions for which I am working to comprehend:

1) I had understood AIG was the CDS "culprit" who had not kept any reserve to cover their CDS policy obligations. (Note that to date, the largest bankruptcy to have occurred was Lehmen, and so I'm imagining AIG was hit hard through their CDS liability)

2) Root cause of financial crisis - Was this not a domino effect of defaulting (BBB sub-prime) home loans which were packaged and sold by investment institutions as CDO's (AAA prime), also now widely referred to as toxic securities? If so, I think it might be fair to say that for those who could actually have kept their mortgage payments up to date were flushed down the toilet when the FED raised the prime rate. To minimize default rates on these loans, some actions or efforts should have been taken to renegotiate, and lock rates on "affordable" levels prior to increasing the prime rate. Unless of course, the intent was to manufacture a housing crisis.

I simply don't comprehend how the financial crisis doesn't have it's roots firmly planted in the soil of a housing boom and subsequent crisis due to mortgage default. How are the financial institutions planning to recover if something isn't first done to reverse a rising mortgage default rate?

Goldman, Morgan Stanley May Want Citigroup, CreditSights Says
http://tinyurl.com/6r3kdm

(Reuters) - Citigroup Inc is nearing an agreement with U.S. government officials to create a structure that would house some of the financial giant's risky assets, the Wall Street Journal reported on Sunday.
http://tinyurl.com/5os4jb

2nd_Ave,

There was a time when I would have agreed wholeheartedly with everything you just wrote, but the jobs you listed (service oriented) cannot be readily "sold" to other nations. If we must buy what they make without anything to sell them it is a one-way street draining our capital.

As far as education, I mentioned my one son — National Merit Scholar ship to an Ivy League school, twenty four years experience, but in danger of his entire department being outsourced to India. The last two people hired to do the same work he does have Ph.Ds (he has a BA only). The importing of foreign college educated workers (Bill Gates has asked for more visas.) is deflating the earning power of a higher education which is costing record prices.

Retooling: Since the fall of the Soviet Union when the "Peace Dividend" was available, I have sent a plan for a national passenger rail system (rolling stock to be built in auto assembly plants) to each presidential candidate — no replies —ever.

We have never experienced real free trade. China has heavy tariffs we do not — look who is better off. Thomas Friedman's book, "The World is Flat," is a one-sided report after interviewing those who were winners only. The playing field is NEVER flat.

looks like the USD printing press will be on "high" for obama's 1st day on the job.

"Obama Will Get Stimulus Bill First Day, Democrats Say"
http://tinyurl.com/56lfqz

Using a long term view, I think we're early on the Trade of the Generation. Bonds won't complete their topping process until many of the major banks start to fail and we see some bank runs. The subsequent panic will lead to another rush into Treasuries. If bonds drop here it would be one of the shortest bond bulls of the last 20 years.

Grym/2nd
From NY Times
http://tinyurl.com/58wbpa

The troubles at E*Trade Financial Corphave worsened and now hinge on whether it can secure U.S. government funds that would bring some relief to its book of bad mortgage loans.
http://tinyurl.com/577uwa

ALOHA !!

Does anyone here see the absurdity of the OBAMA $700bil stimulus package? They plan to go into more DEBT in order to create jobs. We don't know what kind of jobs yet or how long these jobs will last ... they're just "jobs"!

If I came up to you on the streets and asked you to loan me $3,000 and I would create a job for you would you loan me the money? That is essentially what the OBAMA plan is.

Hanks Plan was me coming up to you in the street and asking you for $3000 to save the US BANKS and the CEO's bonuses. Would you loan me the money for that?

Now enter the two party system ... the US CONgress!! Add a little political KY Jelly(PORK)and PRESTO CHANGEO it slides right through!

Is that CHANGE? Is that HOPE?

You know I am sick of the word HOPE ... I am tired of living in a country that just sticks its head in the sand and HOPES! I am tired of living in a country that thinks shopping and shuffling DEBT is GDP! How is it we stick our head in the sand, you ask? We vote the two party system that's how! We accept complete failure in our leadership! PERIOD!

You want CHANGE? CHANGE THAT!

Now that the big banks are going down, I'd like to propose a new banking index. Let's call it the No Mortgage Assets Stock (No MAS) Index. Members will include the following companies:

*Bank of Pfizer
*Bank of Merck
*The Golden West Bank of Sanofi-Aventis
*United States Bank of Google
*The People's Bank of Apple

The combined Net Cash balance of the No MAS index is currently over $100 Billion.

ALOHA !!

vinod ... INDIA CALLING ... VERY COOL! AWESOME!!

Wake up AMERICA ... Do you want to "emerge" or "de-merge"? The government of INDIA got out of the way! Ours is a perpetual BOAT ANCHOR!

Grym-

"the jobs you listed (service oriented) cannot be readily "sold" to other nations. If we must buy what they make without anything to sell them it is a one-way street draining our capital."

it wasn't that long ago that Saudi Arabia was paying US health care workers full expenses and hefty sums to staff their state-of-the-art facilities in Riyadh and impart state-of-the-art practices and knowledge...

the problem with a degree in the US is the stagnation many degree-holders fall into following graduation...in many cases, we don't require much in the way of post-graduate education, and most jobs become routine in a matter of months...

if we're serious about 'protecting' our jobs, then we need to do more than come home and turn on the TV...there are hungrier people in the world who spend evenings studying, learning new skills/improving existing ones, planning new businesses, and intent on creating better lives for themselves and their families...now, life is short, and i'm going to waste my time exhorting someone who prefers to watch TV to get off his a-- and crack open a book; but he should know there are risks and consequences to any decision he makes-> not singling anyone out here, but if i were to compare the average autoworker in Detroit with one in India, i suspect we would see more than minor differences in priorities...

finally, i would not rule out the Boomer generation...yes, i know that there are many immigrants from China and India with impressive credentials and work ethics, but (and i'm trying to be honest with myself here) i haven't met many who can compare with the guys i grew up with...if the Boomers get it together and set their minds to it, my bet is they can turn the economy around in record time; what's been lacking is the right inspiration...I don't know if it comes in the form of the Obama administration, but if not, the first economic crisis of our generation should do it...

DJIA 12000 before 6000?

kaimu - It takes money to make money, right? Let's say Obama actually creates value-added jobs with his stimulus package instead of just handing it out for people to spend on foreign products. Wouldn't that make sense? These jobs might produce products that someone will want to buy, adding value to the materials consumed in the manufacturing process. For instance, tractors, bull-dozers, televisions, computers, solar panels, commuter trains, wind generators, (coal liquifaction plants?), attach infinite list.

It's a far cry better than fluffing up some fat-cat's wallet who turns around and builds a factory in China somewhere.

Personally, I don't care which party does it, this needs to be done. Not all that long ago, everything consumed in the US including energy, was made here, not somewhere else. If that's Obama's vision, and it produces results, then I can support it no matter his party.

Operative word - Results! The bottom line is what counts, not necessarily how you get there. No?

vinod- i've thought a few times about joining one of my younger brothers in Hong Kong, but it's never going to happen; every time i visit, the pollution kills me...China is so far off the map culturally that it would take me another lifetime to adjust...i can understand the current wave of anti-US sentiment on the part of some US workers, but I believe it's temporary, and those leaving now who are able to return, will do so...JMO...

I'd say 6000 before 12000....gov't is now going to bailout Citi....what's next GE?

http://tinyurl.com/5v8pou

http://tinyurl.com/6azwru
"Citigroup, Fed Said to Weigh Plan to Limit Losses"

these are historic times for sure....I keep thinking about GE...it's 50% a financial company and it has a lot of commercial RE exposure which seems like the next really bad thing

between the Citi debacle and Obama naming his economic team/plan we might see some whiplash generating volatility tomorrow...

blue bluff- you have a bet, my man ;)

2nd - I want you to win this one....big

http://tinyurl.com/6f475m
"Citi eyes putting risky assets in "bad bank""

Is this just not Enron all over again? but now the govt is aiding the company vs indicting them?

"The "bad bank" might take on some of Citigroup's more than $1.23 trillion of off-balance sheet assets".........$1.23 trillion????JP Morgan, BofA, they all have this crap.....what company manufactures the printing presses; I'm going long!

What this people at HB&B have done is set USA back about 5 year.
Because of current crisis, many companies are cutting back on R&D/innovation/tech upgrade/training and education of their worker
And in human development. All of this going to affect us in future.

I think in short term market will move either way base on situation at GM/F and C
Also put sold buy WB through his brokerage GS will also have impact on BRK and GS
If market go down further

http://tinyurl.com/5utdlp
"Builders Make Plea for Federal Aid"

2nd_ave, you said that you don't want to sell your positions on weakness, and I feel the same way about my positions. At the same time, I think SOMETHING should be done if S&P 500 will be below 820 tomorrow shortly before the close so as to protect the portfolio against a plunge to lower lows (a failed rally kills hopes and invites new lows).

I don't want to short any stocks at these
low levels, because when the market direction reverses and I keep stubbornly holding onto these shorts, I will lose MY shorts. :)

So why not just buy puts on some market index (say Russel 2000)? I already bought puts on QQQQ a few days ago, which closed on Friday exactly at my purchasing price.

Here is my trading plan for Monday. If by the time I wake up on Monday (10am PST) I'll see that S&P 500 is below 800 and is going down, I'll buy more puts. If that doesn't happen, but by the end of the day S&P 500 will still be below 820, I'll buy more puts (as it might mean
that the rally is running out of steam). If the stock market rallies hard on Monday, then so be
it -- I'll hope that the rally is strong enough so as to rise above the level of some of my recent purchases, which will give me a chance to sell some of my positions with profit. At the same time, I'll keep the small QQQQ put position I currently have as a potential "consolation prize" in an event of an unexpected market plunge (say if the market movers and shakers learn ahead of the rest of us that the automakers will not be bailed out).

What is your view about insuring your portfolio with some put options?

Most Asian markets opening a bit lower.

Bill is touting his ToG but its one-sided because of gold/miners up as far as the week that was. TLT was up for the week. Bill said in WIR "Corporate bonds were trashed this week." I don't see such in the ETF's AGG, LQD, BND.

That said, I am a holder of TBT and am looking forward to lower bond prices. Also higher silver prices and value in SLW. I am patient but not increasing that spread/hedge just yet.

got to say something....

2nd -
IMO - 6,000 ... we might get close to 12k but we could(will) hit 6,000.

CP -

#1) You got it.. and "AIG" didn't "model" accurately for the results that occurred or they didn't have enough set aside.., a good long read from Panzner's website.
http://tinyurl.com/5965w2

IMO.... I'd like to add more opinions...
#2) Cause of the financial crisis is that the world has to much debt. There is to much "bad" debt and not enough good debt. Problem is no one wants to write off the "bad debt" because they aren't capitalized enough to be able to fall within accounting standards or solvency.
Over the past 25 years the world has added more and more debt. This is at our banking level, imagine that how bad it might be hitting many consumers; banks should have risk "teams". Consumers follow the crowd... right?
Wall street seems to have caused the first domino...

They raised the prime rate to slow down the asset bubble (economy could be overheating, inflation a concern, higher rates slow down money) that was forming. The higher rates had tighter money behind it. This started to cause lenders to slowly tighten credit requirements. During this run up... there was such a boom of new money in the country, especially hot mortgage money that"heartbeats" were getting house keys. These companies could barely issue the money fast enough..
After the initial subprime and later Countrywide problem. News started to hit. Immediately mortgage money got very tight and the demand for new money was met with little/hardly/any supply. Loans were more difficult not the housing market does not have enough buyers to support the sellers who "thought" they could turn a house like the ones before. We should not forget all of the commercial/residential projects that were probably overbuilt. That is just the USA.

In the past two years, I have seen parts Europe
which was being over built. Boon cranes everywhere, everywhere, absolutely everywhere. I went to Central America (couple countries) and it was insane. There was way to much building, I could never understand how the locals there could afford to pay $3.75 a gallon for gas either. If it is difficult to pay that here, how long can you afford to pay it there... Large and small cities, all citizens.
We now are seeing the effects even in China, they at least can spend some doe to keep their economy growing (hopefully) at a reasonable number.

If money doesn't perpetually grow and slows down to fast, if the house was built on a small deck of cards; we have a system that can't afford pay it's mortgage bills... so the cards are gonna fall.

These economies could never really produce the goods and services to support the amount of money that was in the system. To much debt not enough running capital. The debt caused asset prices to increase. Like from 2003 to 2007 all asset classes increased in value. We never really got to wash out the excess debt from the tech bubble (politically not "good"). That is additional debt overhang that needs to go too...

WIll Obama allow the debt to unwind? Course not, so they have to spend more money. The question is how long will the rest of world allow this?
I think a while longer...

Or how big is the monster that we must finally take down?
BIG
Can we let her build more and come back or is now the time battle the debt "boogie" man?

Panzner, Prechter, and Schiff have all written books about this. It makes a lot of sense as all of them hit real strong points.

ALOHA !!

CP ... Way off base!! BIGGER and more EXPENSIVE GOVERNMENT is not the solution, its been the problem all along. You perceive "value-added" jobs as OBAMA'S goal, whats that look like here in America? In essence everyone voted for OBAMA and he hasn't defined a single plan. We voted on OBAMA based on HOPE and CHANGE! That's a lousy reason to vote for someone, especially if that someone has grown up in the exact system that created all the problems. How many of OBAMA'S CABINET AND APPOINTEES and OBAMA himself have ever started a business in America that succeeded? I define that as JOBS 101! How can you create jobs for a NATION when you have never run a business that ever created a single job? None of these guys have ever run their own GAUNTLET! They're all career politicians and academics hiding out from the "real world" pretending to have "real world" experience. ITS JUST NOT POSSIBLE!

OBAMA come to my farm for six months and I'll train you on all you need to know to create a job! But be prepared to sweat and not just manually buddy!!

When the US government makes the decision to throw out the failed US BANKS and US Corporations that flourish off government contracts and start following the example of emerging market governments like Ghana and Panama that focus and support small business we can talk about job creation. One easy way to jump start jobs is to offer a ten year tax-free period for small business start-ups! That's what the governments of Ghana and Panama do. What's wrong OBAMA, can't get your head around the concept of "tax-free" for ten long years? It's called LONG TERM planning as opposed to throwing money and HOPING!

All the US government has to do is get out of small business's(THE PEOPLE) way! No, they won't they have been trained to meddle and control and legislate and regulate and spend and spend and spend! That's the GAUNTLET!

I would not be surprised to hear that OBAMA'S idea of creating new jobs is to extend unemployment benefits and create a new government agency called NEW VALUE ADDED JOBS DEPT and give GE and IBM and GS and LMT what's left of that "stimulus" so they can prop up their balance sheets!

We'll see ... since he didn't define anything before we voted for him it looks like he's in the driver's seat! As usual all these guys are experts at is GETTING ELECTED!! After that we get to watch them fumble the ball for four years!

YOU GET WHAT YOU VOTE FOR ...

blue bluff/David- in the early nineties, shortly after moving back to the Bay Area, i rented a small vacation house up in the mountains near Sonora...at night it would be pitch black outside, and remote enough from traffic that there would be nothing but dead silence (there is nothing as quiet as the mountains in winter)...i had a small electric piano, a small boom box, and a bunch of books...no TV, and of course, the Net was a few years away...part of the reason for the vacation was thinking seclusion would 'inspire' completion of a piano piece i had been working on literally for years->well, it didn't work...you can't force anything when it comes to inspiration...it never occurred to me that the missing 'link' might be maturity-> my emotional link to the composition was a boyhood spent in the small town of Wilkinsburg, today a very economically depressed annex of Pittsburgh (Dad was working for Westinghouse right out of graduate school, and on a tight budget)...one of my (self-)defining memories is standing in the early mornings at the window on the second floor we rented and watching soot rise from the smokestacks along the Monongahela..i was seven when we relocated to California, but not before those years left their indelible mark on who i am (let's just say it was not a childhood free of profound sadness)..well, my youngest is now almost seven-> the experience of raising him (we are very much alike) is finally giving me the perspective to work on it again, with directions i was unable to conceive of 17 years ago...

what does all this have to do with the DJIA?

(a) for one thing, i place greater weight on the opinions of those traders who were around for the '73 recession, or better yet, both the thirties and the seventies; in general, i don't see the "older guys" panicking right now...

(b) secondly, i place greater weight on opinions that have the stamp of maturity; there were a few voices advocating selling at 14000 that made perfect sense to me, and they tend to be the same ones advocating buying now..they also tend to be right...when i was younger, i was more easily swayed by opinons; now i use more discernment, and make more distinctions...

(c) third, things take time (sometimes you just have to try placing yourself far enough down the road and imagine looking back from that vantage point; a hard thing to do even when you're older, but almost impossible when you're younger)-> DJIA will arrive again, and much sooner than we think; we just have a hard time 'seeing' it right now...it's also pointless trying to rush it; let the DJIA works its own way back up without trying so hard to come up reasons for it to do so...

i plan to be fully engaged as possible watching day-to-day moves in the market simply b/c i enjoy it, and many of my decisions are based on sentiment...but i can assure you i will not be fully engaged emotionally- were the bottom were to drop out, i'd be watching every tick, but with a keen eye and a composed mind; what history teaches us is easy to forget; what your own life teaches you is not...although

i meant to say "DJIA 12000 will arrive again, and much sooner than we think.."

...although i can't explain it, what i've learned about human nature in the course of my life just argues against the need for panic right now...not saying there are not times when one SHOULD panic, but not over this..if anything, i think it's time to look forward to positive change...

sorry for the disjointed post- trying to help with dinner at the same time...

Just heard Dennis Gartman on CNBC talking about how he thinks inflation ain't happening, and that we're in for more deflation. Interesting to see so many commodities/metals guys disagreeing about gold and precious metals right now.

Dollar Is Flying Away from Brazil

In the first half of November, more dollars left Brazil than entered it. The foreign currency inflow into and outflow from Brazil, up to November 14th, generated a negative result of US$ 877 million. This information was disclosed November 19 by the Brazilian Central Bank.

http://tinyurl.com/6c5c4k

2nd - thanks for the post, I enjoyed it...on a side note I've been finding recent events very musically inspiring....lots of songs about corrupt bankers, politicians, greed...you know, the usual mixed bag of complaints :)

I don't think there's any need to panic right now. It's OK to wish we hadn't bought in until DOW 7500 but DOW 10,500 was a better entry than holding the entire time.

I think we make it to DOW 12K before DOW 6K. I think this coming Black Friday retail sales will surprise alot of people. I don't know anyone spending less on Christmas this year. And I know a few people who should spend less but are spending more anyway.

So, if we go down to test the lows again this week I'll be loading up un ultras for the Santa Rally.

Rob.

A few thousand points on the DOW will really help my DDM calls.

I'm still not so sure about my UYG calls though. The banks should shine with Geithner running the treasury but maybe that's the easy trade that will get crushed.

Rob.

2nd, I wonder from your posts if you're equating selling with panicking. I suppose we all do: there's probably not a person on this blog that hasn't sold in a panic. You described before your childhood memory of getting swept into the deep end of a pool, and not panicking. Instead, I think you said you got really calm and gave yourself over to whatever would happen. Why did this memory come up now?

I've mentioned before I have PTSD, and I can vouch for the truth that the market has a way of triggering old traumas, of being whatever ghoul from the past you are most afraid of, and of eliciting the same kinds of old responses. I can't tell you how many times I have stood firm, for the simple reason that I was determined not to be pushed out of a position. Or just watched, frozen, unable to respond as the red numbers got larger and larger. My actions had nothing to do with an analysis of the market, and everything to do with an emotional response triggered from something in my past.

Part of my path (in trading, in life, in healing) was to learn a third way. Not just either/or, not just stand firm or freeze/dissociate. But a third way, which is to dodge. Or as Bill might say, to dance. Now if I could just be more consistent and not get tangled up in my expectations (like I did Friday)...

http://tinyurl.com/6bch94
U.S. Plan to Aid Citigroup Said to Be Near Approval.

So now can the dollar crash?

http://tinyurl.com/6ak797
U.S. to Back $306 Billion in Citigroup Assets, Regulators Say

how is this going to be received by the market? good or bad news for overall equites? good or bad for USD?

2nd_ave, what do you think the "older" investors know that the "younger" ones don't? I would guess that it is a conviction that the stock market always recovers and grows over time. I am fully certain that the stock market will be higher two years from now. I am just wondering about the near-term prospects, which NO ONE currently knows. Will the stocks make new lows before December 31? They might... What would be a tell? If the S&P 500 does rises to 860 level (so as to convince the technical analysis that it broke above the resistance level and is starting an uptrend) and then turns down (just as DOW broke above 13000 in May to convince Collin Twiggs that it is in an uptrend, only to reverse its course the next day). My point with buying puts when the current rally fails is to make sure that the value of my portfolio, marked to market, will not go much lower than the current levels.

"The president-elect is due to hold a press conference in Chicago at noon New York time."
http://tinyurl.com/64qoo7

Should be interesting open, lunch, and close.

NYU - I think the markets will react positively to this news. Like I said on Friday, the government will do whatever it takes to keep Citi alive and that is a positive for the markets. I wouldn't be surprised to see Citi in the upper single digits by the end of the week.

I would warn you though that BAC looks very shaky right now. They significantly overpaid for MER and also bought out CFC earlier this year. These were large bets that are putting BAC under significant scrutiny. I would be watching BAC to see how the markets trend over the coming week.

Teamonfuego,

C may go up, but every announced bailout has caused the market to tank.If C divides into good bank---bad bank they may call BAC to buy the bad bank. Frankly what took C so long. Is it not ironical that GS proposed for C to buy them out in Sept. Does anyone know what GS exposure to C. Possible counter party to C toxic debt? Does Warren, Does Paulson, 20 billion capital infusion? 20 billion could buy F and GM both at a 400% premium. Just thinking out loud.

I think GE is also another company we need to watch...

also, given the importance Black Friday has on our economy and psyche of consumers, I wouldn't be surprised to hear Obama's stimulus plan, his plans on taxes, introductions of his economic team, and many other things this week...

Has anyone read this book ?

"Entries & Exits: Visits to 16 Trading Rooms "

Is it a good read and help for trading and understanding technical analysis.

I am look at practical use of TA.

Any inputs very much appreciated.

I have read Entries and Exits, but would recommend Alex' latest book Sell and Sell Short as a more succinct description of his approach to technkical analysis. Entries and Exits profiles and comments on trades by 16 traders with a range of styles.

Fed out of ammo? Hopefully it doesn't make it to front page WSJ.

http://online.wsj.com/article/SB122748912533552007.html

the question of the day for the markets tomorrow will be...if C needed to bailed out this quickly, how bad is it out there?

ALOHA !!

Here is what Dick Cheney said about the markets back in 2007 ...

"The fact is, the markets work, and they are working. And people - some of the big companies obviously - have taken risks. Risk means risk. And there's an upside as well as a downside in some of the choices they've made. We have to be careful not to have this set of developments lead us to significantly expand the role of government in ways that may do damage long-term for the economy. We don't want to interfere with the basic, fundamental working of the markets."

-Dick Cheney 11/26/07

What changed Cheney's view?

This is the type of flip-flop that leads me to believe these guys with their Ivy League degrees really don't know what the hell they're doing! This whole BAILOUT is nothing but a huge "fiscal monetary experiment" to try to convince the Keynesians that the Austrians were wrong all along! Its not working the financial markets are not fixed. Or do we need a definition of the word "fixed"?

I am resigned to the fact that things will never be the same for America from here on out ... Fiscally speaking America is a lame duck! We just pile DEBT onto more DEBT then ask foreigners to loan us more so we can accumulate more DEBT to pile onto the huge pile of DEBT we have amassed.

I have been addressing the USA Balance Sheet for many weeks now. Without tax revenues the US government cannot exist. With payroll taxes dropping off a cliff(down 79% from FY 2007)and US corporate tax revenues down to all time lows, as even projected by the Bush FY Budget 2008 the percent of US corporate tax revenues will dwindle to 2.9% and then go to zero by 2010. That leaves funding the US government from income taxes on individuals and retirees. Many retirees depend upon dividends and interest to provide added cash to their monthly SS checks and many of those dividends and interest have been wiped out. The States are suffering tax revenue collapse as well. What's left is to finance the US government using DEBT, issuing more Treasuries, but even Treasuries have yields, which are liabilities to the US government just as surely as paying out more unemployment benefits are liabilities to the USA Balance Sheet!

Ultimately the final test is whether the US government cuts government spending. We will see what OBAMA does, but so far it looks as if he is too keen to keep the Bush war machine alive and well and "stay the course"(God, I hate that phrase)in IRAQ! Does the US government renege on any of its promises to the myriad of entitlements to both citizens and corporations as well as to foreigners(allies and non-allies alike)? Is US Foreign Policy built upon shifting sands, always in a state of flux, to where allies one year are not allies the next? Will US citizens applaud more taxes, aside from Warren Buffet? How much more do we need to tax the rich to get back into the black or is that just good money after bad?

OBAMA you have a full plate ... You proved you can get elected with OPRAH'S help, lets see if OPRAH can pull enough strings for you to govern us out of the manure pile that has been piled up for many decades since 1913! Remember, it took two parties to get this much DEBT!

Mr. Bush say "Hola" to Paraguay and Mr. Cheney don't forget the burka for Mrs. Cheney over there in Dubai! DOSVADANYA buds!!

SWING HARD AND HOPE!!!

Sandy: re Entries & Exits by Alex Elder

An interesting read but more for intermediate TA practitioners and Jock's comments above are spot on. If you're looking for an entry level book then his prior book "Come into my Trading Room" works for both beginners and intermediates. He has a "value based" methodology that works well in trending markets and an impulse method for momentum trades. Alex is more into indicators than price patterns as he believes the latter are too subjective.
If you want a complete overview to trading I'd recommend Vadym Graifer's book "The Master Profit Plan". In this book he helps you determine what sort of trader you are or ought to be.

It really depends on how deep you want to go into TA. Personally I think if you don't keep TA simple it gets too unwieldy and contradictory where indicators 'cancel' each other out. However I am sure there are others on this board who would disagree and get a lot of value and profits from complex TA. All the best for your reading.

ALOHA !!

Is GM for real? The new Camaro is coming in 2009! Man Americans will just not let go of that AMERICAN DREAM! We're going to BAILOUT the Camaro and private jets and the UAW?

READ ON:

08/10/2006, 10:05 AM
Chevrolet News
Official: General Motors will build new Camaro; arrives in 2009

2010 Chevy Camaro Deals
Find Amazing Prices on a New Camaro from a Local Chevy Dealer!

GM Chairman and CEO Rick Wagoner announced today that GM will build an all-new version of the Chevrolet Camaro muscle car based on the award-winning concept that debuted at the Detroit auto show in January. The concept “ignited the passion of car enthusiasts around the world ever since,” the automaker says — even spurring consumers to start petition drives and send in certified checks in hopes of placing early deposits. The car will go on sale in the first quarter of 2009.

“The overwhelmingly enthusiastic response to the Camaro Concept continues to remind me of the uniquely iconic place our products can have in customers’ hearts,” Wagoner said. “Camaro is much more than a car; it symbolizes America’s spirit and its love affair with the automobile.” (more)

kaimu,
is it not the wee small hours in Hawaii? Are you nocturnal? Perhaps Mr Dick Wagoner (don't you just love that name) wants to record as many column inches as he can before he is given the boot (or trunk as you guys call it)!

http://tinyurl.com/5j3x7p

Airwolf Bernanke swings into action.

FarAwayEyes- I know where you're coming from (and you would make a good analyst as well ;), but my memories of Wilkinsburg are distinct from my (isolated) memory of the near-drowning incident (which, for whatever reason, remains a pleasant one)...in answer to your question: no, i understand the difference between deliberate action and fatalistic inaction, and that you took the former (and i'm pretty sure i'm not stuck in the latter); but since you bring it up, i'm willing to reflect on that premise..if we ever find ourselves sitting next to each other on a long plane ride, it would be a hell of a conversation!

Vinod,

Thanks for the NYT article — very interesting.

What a confusing time we live in. For these Americans returning to the ancestral home even more so.

With the passing of NAFTA in 1993 I wrote a letter to my congressman expressing my expectation that globalization would mean a move to the mean (a leveling of education, income, etc. — not a mean attitude) for all. We are only beginning to feel it nationwide — here in the midwest it has become the norm.

This has raised living the standard for some and lowered others. For the U.S. it has been a large drop for many in a very short time. Other massive shifts, such as from agriculture to manufacturing, took a generation or more and were mostly confined to domestic competition for jobs.

Eventually I expect we will merge into one-people-of-the-world. However, each one lives in the immediacy of the day and must defend his own and family's well being.

Unfortunately, there will always be those who are willing to exploit the situation at the expense of others.

Only five years ago the CFO of a company who had been one of my best clients for over twenty years told me that I must "squeeze" my suppliers so that I could remain competitive.

He said they were already beginning to demand price cuts from their suppliers. (He was receiving many stock shares through options which spiked on each cut to costs.)

I said I had no intention of doing so to those who had provided for my needs — and if anyone "demanded" it from me — they could "sick it in their ear!" My suppliers eventually all went out of business, as did I, but at least I knew I didn't increase the "squeeze" they felt.

That company and nearly all my other former clients are now operating in China, Mexico and South Africa. Thousands of employees lost their jobs here and their management all did very well for themselves.

2nd_Ave,

"I don't know if it comes in the form of the Obama administration, but if not, the first economic crisis of our generation should do it..."

IMO that crisis is here and just beginning to be recognized nationwide.

Go for it!
With my sincere best wishes.

Obama's promises...

As Kaimu said — expert at getting elected — period. It would be a pleasant surprise if he accomplishes anything beyond simply getting a second term. Let the campaign begin.

There may be a few out there old enough to remember the Andy Hardy movies with Mickey Rooney and Judy Garland.

Same plot each time — big problem, get their heads together and ponder, then the solution...

"Let's put on a show!'

Everyone pitches in and the community rallies, raising the needed funds to solve the BIG problem.

Funny, Obama doesn't seem that old :-)

Same plot each time — big problem, get their heads together and ponder, then the solution...

"Let's put on a show!'

Grym,
Sounds like you were at the FED tresuary meetings.
Bob

gg up 4% pre market
slw up 13.8% pre market
C up 51% pre market - 8M share traded

Good morning.

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

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

"We have just come through a decade-plus in which the Fed intervened "successfully" enough so that folks came to look upon the stock market (and then the real-estate market) as pet kittens that spit out hundred-thousand-dollar bills. Markets are not like that at all. They are more like savage beasts looking to rip your head off.

The era of "pet markets" that effortlessly make people rich is definitely behind us."

Latest Bill Fleckenstein:

http://tinyurl.com/6ry4xl

it seems funny to me that a government proposal to bail out what was once the country's largest bank will cause the market to rally...especially when C's problems are shared by others standing in line with their greedy little hands out....it also seems funny to me that the U.S. can continue to find billions to bailout banks but can't come up with more money for the disabled, sick and homeless....basically we could wipe out poverty and homelessness in this country but that's not important enough to do.....shame on us

It's very interesting how the government immediately writes blank checks to their favorite banks but makes the Automakers beg for 1/20th of the money given to any one bank.

Even with all the problems in Detroit, I think they add much more value to the economy than the banks. They should just be able to reset the union wages and benefits with reality and move on without government money but with the stranglehold the unions have on them they'll never survive without it.

I still don't think anyone should be bailed out but it seems very hypocritical to give the banks the keys to the kingdom and lock the Auto companies in the cellar. Especially since the government has encouraged the unions to plunder the car companies.

Rob.

Seems like the bankers control everything.

Well at least UYG should climb over $10 per share anyway.

Rob - agreed.

Also, Citi's deal with the U.S. http://tinyurl.com/66f58j
they can't pay more than 1 cent dividend/quarter for next 3 years...

So Citi can't pay shareholders the 8% the government will be getting for their "investment".

Talk about a level playing field right?

It will be interesting to see whether this rally has enough power to start pulling money in from the sidelines, making the people sitting in cash chase the market.

I also think plenty of people have been successfully shorting every rally for so long that they'll keep doing it and we'll climb on their backs.

Maximum Frustration seems to be up for now.

Rob.

"Fed Pledges Top $7.4 Trillion to Ease Frozen Credit"
http://tinyurl.com/6pv77f

Now can the usd crash and gold/silver rise?

as per my earlier sentiments when gold was in the low 700's, ill be back in gold with another close above $790, which seems to be shaping up in spades right now.

as an aside, gartman has gone short gold, and PVE was just on BNN. i dont know what to make of PVE anymore. he was held in such high regard a few years ago, but now only pops his head on TV to discuss gold from a broad macroeconomic perspective.

this week should be interesting if gold continues moving up aggressively through the $850 range.

OBAMA runs a campaign on the promise of CHANGE and everything I read is pointing right back to RUBINOMICS. The start of all this excess greed by HB&B and their well connected buddies. Close friends of Robert Rubin, and even boy Rubin are invading the White House under this prez. You think Rubin and friends had blue balls from making love to the working people under the Clinton regime, them same testicles will soon be scarlet this time around. There isn't CHANGE......just a different chapter......
Next GM will bring back the camero. Kaimu is nocturnal.

dr. cosa
I suspect PVE is buying up all the juniors he sold about the end of last year.

These are my recollections and they could be fuzzy and the dates way off -- A year ago or more he was promoting all the juniors, then seemed to disappear from BNN for a while. When he came back on early in 2008 he was saying that he had sold all his juniors and wouldn't recommend buying them at that time. If now he is back on not wanting to talk specifics, he may be reloading. Just a wild guess with nothing to back it up.

I been long a big 'ol pile of yamana since the 4.80's