Bill Cara’s Blog for Apr 2, 2012

CTA Trading Desk Morning Report

[8:45am ET] Good morning, Geoff here.

As Bill mentioned in the WIR, we added to energy stocks last week because we like the space long term. We saw weakness and then on Friday, a number of Cara 100 stocks in the energy sector bounced off of oversold levels after XLE found support on the 200 dma on Thursday. The probability of a successful long trade rose and we now have defined area to place stops. If the trade works out, it should do rather well and if it doesn’t, our stops will hit and our losses will be small relative to the possible gains.

We are also watching for the coming lift-off in gold. I have been saying that it will probably be sometime in the last two weeks of April, but with sentiment extremely negative, gold could move higher at anytime.

A break of the February lows in the dollar may mark the lows in gold, energy and material stocks. When it comes it could be fast and furious so get your shopping list together and get ready to buy because this trade could make your year.

Don’t be asleep at the switch.

Have a great trading day!


Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.

Symbol Name Last Trade Change Related Info
^ATX ATX 2,146.41 6:44AM EDT Down 12.65 (0.59%) Components, Chart, More
^BFX BEL-20 2,336.00 3:45AM EDT Up 18.80 (0.81%) Components, Chart, More
^FCHI CAC 40 3,409.76 6:59AM EDT Down 14.05 (0.41%) Chart, More
^GDAXI DAX 6,960.61 6:45AM EDT Up 13.78 (0.20%) Components, Chart, More
^AEX AEX General 320.60 6:44AM EDT Down 2.91 (0.90%) Chart, More
^OSEAX OSE All Share 481.17 6:44AM EDT Down 0.67 (0.14%) Components, Chart, More
^OMXSPI Stockholm General 336.80 6:59AM EDT Down 1.64 (0.48%) Components, Chart, More
^SSMI Swiss Market 6,227.03 6:45AM EDT Down 8.48 (0.14%) Components, Chart, More
^FTSE FTSE 100 5,767.53 6:45AM EDT Up 25.50 (0.44%) Components, Chart, More
FPXAA.PR PX Index 968.30 6:59AM EDT Down 4.80 (0.49%) Chart, More
MICEXINDEXCF.ME MICEX Index 1,527.18 6:45AM EDT Up 8.89 (0.59%) Chart, More
GD.AT Athex Composite Share Price Index 715.06 6:45AM EDT Down 13.87 (1.90%) Chart, More

http://finviz.com/futures.ashx

http://finviz.com/fut_chart.ashx?p=m5&t=ES

http://finviz.com/fut_chart.ashx?p=m5&t=ZB

http://finviz.com/fut_chart.ashx?p=m5&t=DX

http://finviz.com/fut_chart.ashx?p=m5&t=GC

http://finviz.com/fut_chart.ashx?p=m5&t=SI

http://finviz.com/fut_chart.ashx?p=m5&t=CL

The team will check in during the day, reporting in the Discourse when there is a new entry.

Enjoy your day.


Cara on Trends & Cycles


Vad’s Catch of the Day


Kaimu’s Sound Money


CTA Trading Desk Mid-Day Report


CTA Trading Desk Post-Close Report


  1. 10:00 AM ET ISM Mfg Index 10:00 AM ET Construction... [#107109]
    By: davefairtex (5215 comments) Go to top ↑
    • 10:00 AM ET ISM Mfg Index
    • 10:00 AM ET Construction Spending
    • 11:30 AM ET 3-Month Bill Auction
    • 11:30 AM ET 6-Month Bill Auction
  2. 1 in Accumulation Zone 7 in Distribution Zone 5 in Sell... [#107110]
    By: davefairtex (5215 comments) Go to top ↑
    • 1 in Accumulation Zone
    • 7 in Distribution Zone
    • 5 in Sell alert

    Accumulation Zone: Monthly 4, Weekly 2, Daily 4
    Distribution Zone: Monthly 17, Weekly 25, Daily 12

  3. BUILDING PERMITS (MOM) Australia for Feb Actual: -7.8%... [#107111]
    By: Les (7233 comments) Go to top ↑

    BUILDING PERMITS (MOM) Australia for Feb
    Actual: -7.8% Cons.: 0.3% Previous: 1.1% Revised from 0.9%

    BUILDING PERMITS (YOY) Australia for Feb
    Actual: -15.2% Cons.: Previous: -14.6%

    RBA COMMODITY INDEX SDR (YOY) Australia for March
    Actual: 2.7% Cons.: Previous: 3.2% Revised from 3.5%

    The RBA Commodity Price SDR released by the Reserve Bank of Australia is considered as an early indicator of export price changes. The price changes influence GDP and exchange rates.

    REAL RETAIL SALES (YOY) Switzerland for Feb
    Actual: 0.8% Cons.: 2.0% Previous: 4.7% Revised from 4.7%

    UNEMPLOYMENT RATE EMU for Feb
    Actual: 10.8% Cons.: 10.8% Previous: 10.7%

    http://www.fx360.com/calendar/

  4. SVME - PURCHASING MANAGERS' INDEX Switzerland for... [#107112]
    By: Les (7233 comments) Go to top ↑

    SVME – PURCHASING MANAGERS’ INDEX Switzerland for March
    Actual: 51.1 Cons.: 49.5 Previous: 49.0

    PURCHASING MANAGER INDEX MANUFACTURING Germany for March
    Actual: 48.4 Cons.: 48.1 Previous: 50.2

    PURCHASING MANAGER INDEX MANUFACTURING EMU for March
    Actual: 47.7 Cons.: 47.7 Previous: 49.0

    PURCHASING MANAGER INDEX MANUFACTURING UK for March
    Actual: 52.1 Cons.: 50.7 Previous: 51.5 Revised from 51.2

    http://www.fx360.com/calendar/

  5. Good morning. 10:00 ISM Index 10:00 Construction... [#107113]
    By: Bull Hunter (3552 comments) Go to top ↑

    Good morning.

    10:00 ISM Index
    10:00 Construction Spending

    ——

    AMZN – BofA/Merrill downgraded Amazon.com to Neutral from Buy. The firm downgraded shares based on increasing competition in digital media, a longer than expected investment cycle, and tough Q2 comps. Price target is $235.

    KSS – Kohl’s upgraded to Neutral from Underweight at JPMorgan based on relative valuation and improved sentiment. Price target raised to $55 from $42.

    ——

    Other stocks of possible interest:

    PAAS – Pan American Silver coverage resumed with an Outperform at BMO Capital.
    Target $35

    ——

    “Pay no attention to that man behind the curtain.” ~ The Wizard of Oz

  6. obviously allows for some exceptionally precise value... [#107114]
    By: Vadym Graifer (4341 comments) Go to top ↑

    obviously allows for some exceptionally precise value computing:

    Topeka Capital Initiates AAPL with Buy, price target: $1001

  7. AAPL - Apple initiated with a Buy and a $1001 price target... [#107115]
    By: Bull Hunter (3552 comments) Go to top ↑

    AAPL – Apple initiated with a Buy and a $1001 price target at Topeka Capital.

    CNQ – Shares are upgraded to Overweight from Equal Weight by Barclays.

    PFE – price target was increased at Citigroup to $23. Divestitures are on track, but there is no plan to break up the pharma business, Citigroup said.

    QCOM – PT Lifted from $75 to $80 @ Canaccord. Buy

    QCOM – estimates and target were raised at Bank of America/Merrill Lynch. Shares are now seen reaching $75. Estimates also increased, as the company is leveraged to higher global handset growth, BofA/Merrill said. Buy rating.

    SBUX – price target was raised to $70 at Williams Capital. Company is expanding with new products and locations, Williams said. Outperform rating.

    SLB – estimates and target were lowered at Dahlman Rose. Estimates were cut through 2013. Company is seeing lower North American pressure pumping results, Dahlman Rose said. Buy rating and new $89 price target.

  8. May God speed ... the clock is operating. We're underway... [#107116]
    By: Dr. Strangelove (2004 comments) Go to top ↑

    May God speed … the clock is operating. We’re underway. Roger. Backup clock is started. Roger. Gettin’ out of the vibration area. Roger.

    http://www.youtube.com/watch?v=38deOWJPiFk&feature

    http://www.kitco.com/charts/livegold.html

    http://www.kitco.com/charts/livesilver.html

  9. ... [#107118]
    By: Fox1 (150 comments) Go to top ↑
  10. Anyone else been eyeing this one as a value play? The stock... [#107119]
    By: BillySundance (1355 comments) Go to top ↑

    Anyone else been eyeing this one as a value play? The stock was beat up after Walgreens had a contract dispute with Express Scripts (yet to be resolved). However, Express Scripts is now executing a tie-up with Medco and speculation is that Express Scripts and Walgreens would be forced back to the negotiating table.

    Beyond that however, I think Walgreens has a great business model. I see them in a much stronger position than Wal-Mart. Walgreens generally sells items that people need quickly/conveniently – needs as opposed to wants so there small/mid size store model works well. In the future, I think we will see some downsizing in retail as online retailers (mainly Amazon) dominate the market for the “wants” instead of the needs, but WAG should be largely unaffected.

    Numbers wise, WAG has a 2.7% divy (not too shabby) and trades at approximately 12x earnings. Minimal debt. Continuous growth. Excellent brand reputation. What’s not to like?

    • Billy - Some of the Walgreens family live in my community... [#107121]
      By: Dr. Strangelove (2004 comments) Go to top ↑

      Billy -

      Some of the Walgreens family live in my community of Ann Arbor, Michigan. My concern is a coming healthcare reform/repeal post election/supreme court decision that collapses the big pharma monopoly on wildly overpriced wonder drugs subsidized by gov’t pensions/Medicare. Have you ever had an erection that lasts more than four hours?

      • To me 'pharma monopoly' and 'subsidization by gov't... [#107122]
        By: BillySundance (1355 comments) Go to top ↑

        To me ‘pharma monopoly’ and ‘subsidization by gov’t pensions/Medicare’ are 2 distinct issues. As long as these ‘wonder’ drugs continue to be covered by gov’t pensions/health care I don’t see how it would negatively affect Walgreens. I think they would actually benefit from any kind of shakeup in the big pharma “monopoly” that would make prices cheaper for the clientele. Now, if gov’t pensions/Medicare stopped offering subsidies that would be a big issue but is that a realistic possibility?

        • Doctors already being called out for receiving sponsorship... [#107124]
          By: Dr. Strangelove (2004 comments) Go to top ↑

          Doctors already being called out for receiving sponsorship money from Big Pharma to prescribe overpriced product. See what your doc gets:

          http://projects.propublica.org/docdollars/

          If you think gov’t funds can keep paying for the $billion/year drugs of questionable necessity, think again. Walgreens gets a big piece of that pie.

          Read up.

          http://health.dailynewscentral.com/content/view/00

          Big pharma won’t last and Walgreens/CVS will go down with them. A supreme court decision could crush these stocks in a heartbeat. Price controls always play a role in currency wars.

    • ... [#107131]
      By: Grym (5469 comments) Go to top ↑
  11. Here's a super lightweight who FAILS to recognize that the... [#107117]
    By: Dr. Strangelove (2004 comments) Go to top ↑

    Here’s a super lightweight who FAILS to recognize that the plunge in stock price came as a result of an activist’s murder rumored to be tied to management. He twists projections to justify the 30%+ drop even though production is taking off in the latest newly released quarterly report. How do these guys get hired? Motley Fools indeed.

    http://www.fool.com/investing/general/2012/04/02/f

    http://www.mining.com/2012/03/28/canadian-silver-c

  12. ... [#107120]
    By: westcoaster (1130 comments) Go to top ↑
  13. Dow and S%P holds... tape seems to be getting... [#107123]
    By: baz22 (2875 comments) Go to top ↑

    Dow and S%P holds… tape seems to be getting heavy…

  14. Hi, Lately I am having problems using the website search... [#107125]
    By: ovidet (54 comments) Go to top ↑

    Hi,

    Lately I am having problems using the website search feature. Anyone else experiencing this issue? I used to be able to search for companies or symbols but not anymore. I get the following error message: “You must include at least one positive keyword with 3 characters or more”. Any help? thanks

  15. FD i am still in... [#107128]
    By: NYUGrad (4750 comments) Go to top ↑

    FD i am still in positions.

    • This was on no news and heavy 4 x avg volume. What i like... [#107129]
      By: NYUGrad (4750 comments) Go to top ↑

      This was on no news and heavy 4 x avg volume. What i like to see.

      reminder, RGR is sold out of guns and wont be taking orders until end of May or beginning April. SWHC is releasing/announcing a new single stack pistol April 12.

      All firearms manufacturers are selling everything they can make.

      good luck.

  16. bailed on last year....China.. ' seed ' and ' cga... [#107130]
    By: baz22 (2875 comments) Go to top ↑

    bailed on last year….China.. ‘ seed ‘ and ‘ cga ‘

  17. Royal Bank of Canada CFTC alleging "wash trading scheme of... [#107132]
    By: Vadym Graifer (4341 comments) Go to top ↑

    Royal Bank of Canada CFTC alleging “wash trading scheme of massive proportions”

    Google “CFTC Alleges ‘Massive’ Trading Scheme by Royal Bank of Canada” for full WSJ text

    • Vadym, here is the... [#107135]
      By: basketguy (90 comments) Go to top ↑
      • Continuation: Royal Bank of Canada Responds to CFTC... [#107136]
        By: Vadym Graifer (4341 comments) Go to top ↑

        Continuation:

        Royal Bank of Canada Responds to CFTC allegations: Block trades in question were entered into by independent RBC legal entities

        - CFTC has been aware of these transactions since 2005. They were done in accordance with market terms and regulation process.
        - This is not a financially material event to RBC but we do take this situation seriously and intend to vigorously defend our reputation.
        - Before we made a single trade, we proactively contacted the exchange to seek its guidance. These trades were fully documented, transparent, and reviewed by both the CFTC and the exchanges, and for the next several years were monitored by them. RBC’s trading was permissible in 2005, was reviewed six months later by the CFTC and encountered no objection, and it is permissible today under the CFTC’s published guidance.
        - Given no objection to the trading activity by either the exchange or the CFTC in 2005, it is absurd to now claim these trades were either fictitious or wash sales. This lawsuit is meritless.
        - The block trades in question were entered into by independent RBC legal entities with the intent to establish genuine, bona fide positions, based on the CFTC’s long-standing regulatory guidance. They were executed at competitive market pricing and no market participants suffered any negative impact, nor has the CFTC alleged any pricing irregularities.

  18. Hi All - Not too chatty tonight are we. Headline news today... [#107133]
    By: Luggie (639 comments) Go to top ↑

    Hi All – Not too chatty tonight are we. Headline news today has the maestrodomo instructing “the unelected court” to honor the law of the land, and meanwhile back on the prarie/deserts we have more great news about the sun, all sure to enlighten loannet – not. Happy Trading

    http://www.zerohedge.com/news/worlds-largest-solar

    • Luggie , I think threatening the court rather than bringing... [#107137]
      By: BOB 47 (361 comments) Go to top ↑

      Luggie , I think threatening the court rather than bringing the country together will widen the divide . It would seem to move from class warfare to Constitutional . I don’t know how this will affect the market . Bob . http://tinyurl.com/898cje4

    • Luggie - I think its tacky to start bashing someone before... [#107140]
      By: davefairtex (5215 comments) Go to top ↑

      Luggie -

      I think its tacky to start bashing someone before they even make a comment.

      • No comment, davefairtex. this site is not friendly to... [#107142]
        By: loannetter (1298 comments) Go to top ↑

        No comment, davefairtex. this site is not friendly to environmentalists. Paint me green.

  19. Sad news from Timmins, Ontario... [#107138]
    By: pulse (324 comments) Go to top ↑

    Sad news from Timmins, Ontario today.

    http://finance.yahoo.com/news/lake-shore-gold-corp

    Quite a contrast to workplace safety and public transparency demonstrated a few weeks ago by FVI.

    This stock had quite a bounce off a 3 year low today with massive comparative volume the last two days.

  20. I caught this link reading the WIR. I understand what the... [#107139]
    By: ea32da32 (2362 comments) Go to top ↑

    I caught this link reading the WIR. I understand what the author is saying but we need to get off this progressive/socialist, backed up by communist 1% agenda. Do we really have 1% running the works? I agree it’s probably the major ‘wallstreet’ bankers (my local banker NOT included), it’s not the thousands of wallstreet traders, their grinding out a living too, no I think we need to calibrate what this 1% is and it’s not the earning bracket that should be thrown in this equation as most common folks have been lead to believe by the dividers; so I’d like to look at who benefits from the current situation. For starters we have the president, staff & minion, then congress and their staff, family, staffs family, minions… Same for the senate, then you have countless agency’s, staffs, their families, so basically the entire federal government, friends, neighbors, tagalongs… Then we get to the corporate side of the federal racket, the governments opium, I mean money supply for a campaign here, campaign there, and all the 30,000,000 million dollar suits, their sycophants and so on… Government re-education, the finest prison system on the planet turning out more perfect criminals upon the people at a specified rate to keep the public pinned down and out of the Feds hair. I could go on and on but I don’t believe this simple 1% garbage for one second and its use lacks cridibility, either ones not considering the other possibilities or is a progressive with their marching orders to divide those that can’t see the forest for the trees.
    Regards
    Earl

  21. Opinion? I like it. How about EROC eagle rock energy? The... [#107141]
    By: ea32da32 (2362 comments) Go to top ↑

    Opinion? I like it. How about EROC eagle rock energy? The dividend looks safe in relative terms and it’s pretty cheap.
    Regards
    Earl

  22. Kaimu, I AGREE WITH YOU! "There are a thousand times worse... [#107143]
    By: loannetter (1298 comments) Go to top ↑

    Kaimu,

    I AGREE WITH YOU! “There are a thousand times worse pollutants and toxins in every major city in America.”

    The fact that we can witness environmental disasters at every turn does not excuse miners or any other company with permits to go out and dig up our earth’s resources ANY excuse to continue to contribute to the degradation of our planet. You know darn well that inspectors and safety measures are finagled and damage keeps mounting up. Do you wish intestinal diseasess and cancers on future generations?

    People in Georgia – whole towns and water tables were devastated by the coal fired power plants not bothering to line their holding ponds, while belching pollutant into the air. Lining those ponds was too expensive? Now Georgia Pacific is buying houses and bulldozing them and sealing up the wells; while citizens who drank that uranium filled water are dying of cancer.

    http://www.cnn.com/2012/03/31/us/georgia-coal-power/

    Safeguards are only as safe as the people who follow through. As are the econonimc incentives offered. Are Ghana farmers now growing orchids and improving their lives, or was that just a nice consulting contract for you to meet the mining company’s environmental study? Really I’d like to know if you followed up and feel Ghana has actually benefitted socially, environmentally and economincally. Most third world countries (like Louisianna) are left holding the bag after some slip up by well run companies and their environmental regulations.

    • Without natural resources like coal, oil, metals, our... [#107145]
      By: davefairtex (5215 comments) Go to top ↑

      Without natural resources like coal, oil, metals, our civilization vanishes. We need that stuff. However we also need to have clean air and water too, relatively free from poison. It seems like it is an either-or choice, and it shouldn’t be.

      And Kaimu has a good point too. Reduce consumerism and debt-funded consumption and we take big strides towards reducing both waste and raw materials requirements. I’m not sure its all due to debt and bad money, however. Industrial pollution was pretty bad prior to us going off the gold standard back in 1972.

      I’m not an “environmentalist” yet I highly value clean air and water. Anyone who has taken a survival class knows the two most critical factors to survival is first air, and then water.

      Who wants to breathe and drink poison? Yet I don’t want to vilify the miners. The work they do is critical to keeping our civilization running. So why does it seem to be so adversarial – us vs. them? Sure, the job of the mining engineer is to get the resources out of the ground as cost-effectively as possible, but making sure the area isn’t poisoned afterwards – isn’t that a good idea too? Can’t we have both?

      It used to be that if a bank went down, the owners of the bank were personally liable for the shortfall. This made bankers very careful people. Perhaps we can take a page from that?

      If the CEO and upper management were required to place themselves and their families in a position – for 10 years – where they were required to drink water and otherwise deal with the health consequences of the mining operation, the level of management responsibility towards such things would increase?

      Management right now is only aligned with shareholder interests right now. If they were in the same boat as the neighbors, perhaps they’d exhibit more enthusiasm for making sure things were done as responsibly as is reasonable?

      • ALOHA!! "Management right now is only aligned with... [#107147]
        By: kaimu (3289 comments) Go to top ↑

        ALOHA!!

        “Management right now is only aligned with shareholder interests right now. If they were in the same boat as the neighbors, perhaps they’d exhibit more enthusiasm for making sure things were done as responsibly as is reasonable?”

        I disagree …

        If they were in the same boat as the neighbors they’d have to file BK! Mining exec management has to be extremely mobile. Do you think it is a good idea for Rob McEwen to like in Mexico City rather than Toronto where the company is based? However, some part of every mining operation, including some of the management team for the project already live in the community! I just explained how I used to live in Chevron “exploration camps” in Maracaibo, Venezuela for eight years of my first eleven years on the planet. How is it not in the best interest of the shareholders for management to strive for a clean safety record and be environmentally responsible?

        No company CEO wants to start a business and spend huge CAPEX to kill people and pollute. That’s a guaranteed road to bankruptcy(BK) and “failure” in every sense of the word. Metal and oil production is risky. We have to accept it or move on!

        Yeah Dave, I do not know why it has to be so adversarial? If you think the top execs of the environmentalist movement and companies that promote “anti-pollution” products do not have agendas that enrich themselves then you do not know HUMAN ACTION! Nobody lobbies Washington DC with the goal to be indigent!

        • To your "In the end are we better off as a society with... [#107173]
          By: loannetter (1298 comments) Go to top ↑

          To your “In the end are we better off as a society with metal and oil based products or not?”

          I believe sincerely that if we recycled and reclaimed our used metals and oils we would not need to keep stripping and sucking up those products from the earth to meet a base level need for those resources. It is the sheer waste and drive to dig that kills. A wrecked ship on a reef in New Zealand spewing containers and oil into the sea, an entire building full of useable materials blown up to make way for a new shopping center. Gazillions of tossed cathode ray tubes, printer toners and cellphones litering the dumps: our waste of resources is absurd.

          I am not sure at all that we need more metal and oil based products. I have been riding an (alloy) bike for 18 months to work without damage to my ego. I am saving: gas, insurance, car payments and yes, all those resources GM would love to use up to sell me some financing. Cars and many consumer goods are after all only an excuse to sell financing. Round 2.

    • ALOHA!! "Are Ghana farmers now growing orchids and... [#107146]
      By: kaimu (3289 comments) Go to top ↑

      ALOHA!!

      “Are Ghana farmers now growing orchids and improving their lives, or was that just a nice consulting contract for you to meet the mining company’s environmental study?”

      Honestly the deal fell through when Doug(former CEO)left. You have to understand there was “capital” at risk … MINE! I was funding a portion of the project and “no” I did not get any $0 consulting fees even though I did spend a lot of days researching and talking with Doug and involving Ghana officials. I also put together a business plan to submit to the Ghana Ag Minister, which I did submit and he asked I provide more in depth data on the export markets in Europe. Right about then Doug announced he was leaving PMI GOLD. I really did not want to continue on without having a Ghana expert and a base of operation already waiting. Starting a business in foreign countries requires a base and a good network. Without Doug I had neither. When Doug is successful with the new company ASANTE GOLD(ASE:TSXV) then perhaps I will revisit the project. Timing is every thing so I may have lost my window. Time is “telling” also, so we shall see!

      My plan was to transport Hawaiian UH cultivars to Ghana. I did not see any reason why Hawaiian orchids could not thrive in Ghana. Maybe ph levels in the local (back up) water supply may be an issue. Thailand varieties are easily grown here in Hawaii as I grow them here myself.

      There are flower nurseries in Ghana right now. None grow Hawaiian UH variety orchids. The key to success would have been the export markets.

      The key to any company being successful whether it is mining or restaurants is the “community”. I have noticed that remote communities in the USA and other countries do value jobs and they are not that picky about what kind of jobs they are. Once again it is the HUMAN ACTION that seeks to lift a persons standard of living not the opposite. If the management of the mining company fails to create a safe environment for the community then they risk losing the company. Just the same as a restaurant owner risks going out of business if they accidentally poison people. No CEO I have ever met has the idea of starting a company so he can harm or kill people and then go out of business after spending huge sums in legal fees. Anytime you are involved in a mining operation there is high risk present. It has been that way since the first human dug a hole to get metal thousands of years ago. Most definitely the risks since then have abated with modern technology. There are no 100% guarantees any where that safety and environmental issues will never happen. Ask any of the firefighters at 9-11. Ask the CEO of Fortuna. In the 1970s I spent years surfing at an extremely popular beach in Southern California where I brought a can of gas with me to clean the oil off my feet before I could drive home. Amazing enough people were not deterred from going to that beach. Heck, we used to spray DDT around the house on a regular basis and I used to play with toys with lead paint. We even drove cars with no seat belts! When you think about it the 1960s and 1970s were MAD MAX years; a total industrial toxic lifestyle!

      I recall my Father’s logic. He was a geophysicists with Chevron, so you could say he was biased. Maybe I am my Father’s son. He used to tell me back in the 1970s when I complained about the oil globs on my surfboard that the oil came out of the ground; its part of the Earth. Before we built cities around major faults there were oil and other toxins leaking out into the environment naturally. I live next to a sulfuric acid belching volcano that has been spewing highly toxic chemicals into the atmosphere since the 1980s and my air quality is better than anyone who lives in LA! In fact the Kilauea Volcano Park is rated the top tourist destination in the State! Go there and you will see lots of Japanese (all)tourists sticking their heads in super heated sulfur steam vents! You can smell and see the sulfur! Why do you think all those rocks around the vent are yellow Mr. Hashimoto? Where’s the ACLU and the Sierra Club? Don’t they want the government to put a scrubber on the Puo-o-o Vent?

      With regards to Louisiana I think voters prefer the “bag”! I used to live there and highly publicized political corruption is the norm! Its a badge of honor! Edwards ran for governor with bumper stickers saying “RE-ELECT THE CROOK”! And they did! Had I stayed there Hurricane Katrina would have wiped out my subdivision on Lake Pontchartrain. A lot of toxins and deadly debris in that flood water! Imagine building a city below sea level or one on a major fault …

      In the end are we better off as a society with metal and oil based products or not? If you agree we are better off with those products then you have to accept there will be risk to the environment. It is impossible to manufacture such products 100% risk free. Some where along the long supply chain accidents will happen! With modern technology we do not have to live in an industrial laden smoked out Charles Dickens world, but we must be reasonable and accept the inevitable risk. In a strange way I honestly believe most Americans think they deserve and are entitled to a risk free pristine life. Certainly our politicians have offered that completely absurd promise in exchange for our votes. Who here has not been indoctrinated by the public school mantra of the cradle-to-grave government safety net? In my day you even “pledged” your allegiance to it. Before people get off on “patriotic” rhetoric with that read the US Constitution, the Declaration of Independence and the Bill of Rights. Nowhere in those documents does it prescribe “robotic” Nazi like obedience to the State. In fact it is the complete opposite. If I could define the US Constitution and condense the spirit of our Founding Fathers down into just two words they would be QUESTION AUTHORITY! We need to revive that sentiment now more than any other time in our history as a Nation …

  23. Posed my uncle a quick email following the bad housing... [#107144]
    By: Les (7233 comments) Go to top ↑

    Posed my uncle a quick email following the bad housing numbers noted Monday morning (see above post). Ray is a retired IT worker with an an interest in politics, who keeps in immediate contact with the Australian economy and society as a taxi driver – this was his reply:

    Australia’s economy is, on my opinion, on the brink.

    Probably the greatest factors against us is the continuing pessimism by consumers & business in the economy – pessimistic people don’t spend. What also don’t Australians have confidence in? The Gillard government that has only a 27% approval rate. The same % that wiped out the Bligh government.

    Most Australians didn’t like the way Rudd was done over by his own people (personally I can understand why they did him in – the politest way to describe him is a non-team player) and with the alliance Gillard formed with the Greens (who are widely mistrusted economically by the vast majority) and the independents. The best thing the federal ALP has going for them is the leader of the Liberals, Tony Abbot, who is also not highly regarded by the community, especially women.

    Construction workers I talk to in the taxi are doing it tough. Coincidently the ABC news tonight showed that the long term trend over a decade or so was a distinct drop in house construction while the long term trend for units was relatively flat.

    Power & water charges are rising dramatically – power by 44% over last 3 years. Petrol jumped 20c / litre on Saturday from a base around 140-150c / litre – and we have an appreciating currency!! This appreciating currency punishes our exporters and tourist operators but doesn’t seem to translate into lower fuel prices which are supposedly linked to some Singaporean index.

    Of course the great fear by everyone is how much the new carbon tax starting from 1 July will impact on the cost of living. Fearful people who greatly mistrust their government aren’t not going to go out on a budgetary limb.

    We are definitely a 2 speed economy – mining, only around 15% of the economy, is going great while the rest of the economy is, at best, stagnant. My local shopping centres have many empty shops. Mining leaders are saying the obvious – this current mining boom will go the way of all booms. As you indicate the great unknown is how China will handle its growth problems which include inflationary house prices that led the western nations to the current economic mess. What happens in Australia when the mining boom ends??

    To us so far removed from Europe it seems that Europe is in terminal economic decline. The only bright light in the world economy is I understand some life is coming back into the US economy. Perhaps the yanks will save us at least one more time!

    We got our land valuation last week – stagnant but still better than most suburbs in the Redlands where prices changed by 0% to -32%. In the respect that this will make housing more affordable for young people this is good. In the respect that it is the main asset of Australians it is bad, especially when combined with the contraction of the majority of people’s super funds. Of course those whose housing loan is now greater than value of your property are in dire straits.

    Someone who can better express Australians’ pessimism is Alan Kohler – the ABC’s economic guru. Read http://www.abc.net.au/news/2012-02-15/kohler-debt-…. He blames our worry about personal debt but if you hunt around the ABC site you will find he is quite cutting about the “world’s greatest treasurer” as the much unloved Wayne Swan was lauded a few years ago. I believe most media commentators are ignoring the elephant in the economic room – the well deserved deep mistrust of the federal government.

    We do live in interesting times!

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    As I ruefully remember saying when I was in Oz, we are a little America, who tends to trend about 20 years behind the US. I guess our age of political mediocrity is finally catching up.

    Sounds like painful cost of living adjustments there. And inflation through monetary policy has yet to catch on in the world. Mortgage rates at 6% or more certainly don’t make life easier on the average Australian.

    So it sounds like Oz is finally catching the malaise affecting the rest of the world. As I’ve said to my family members since a couple of years, if they’re heavily in hock for a mortgage, credit card etc, they should be consolidating and if necessary selling their property to put themselves back into some semblance of black ink.

    Australians are big shareholders as far as retirement funds go. Once BHP goes the way of the majority of the Australian economy, things are gonna be looking a lot tougher, even if the Australian pension system is one of the few fully funded systems in the world at this time. Hopefully I can help some of my family members to get their nest eggs out of the one basket, before the music comes to a screeching halt.