Bill Cara’s Blog for Jul 15, 2011 [See Post-Close report]

CTA Trading Desk Morning Report

[7:00am ET] Good morning.

While there is a focus on the money center banks in Europe today, the trading bias, while a tad bearish, is not yet decided. All eyes seem now to be switched back to Washington and the heated debate over the debt ceiling legislation.

http://stockcharts.com/freecharts/candleglance.html?BARC.L,HSBA.L,LLOY.L,RBS.L,STAN.L,ACA.EU,BNP.EU,GLE.EU|A|B7

http://tinyurl.com/64fe2am

blog11_jul_15.2.gif

The miners in London had a tough start to the session this morning, but goldminer African Barrick, at least, is headed in the right direction.

http://stockcharts.com/freecharts/candleglance.html?aal.l,abg.l,anto.l,blt.l,glen.l,rio.l,xta.l|A|B7

http://tinyurl.com/6c9pg7u

blog11_jul_15.3.gif

The GLD (gold bullion trust – in blue in the chart below) is still outperforming the goldminers (GDX) over the past six months, but over the past three weeks, the miners are quickly catching up. With a debt ceiling plan in place, likely to come in the next two weeks, it’s probably the case that GDX and GLD will sell off a bit.

blog11_jul_15.1.gif

The World Gold Council released their July 2011 data on the gold holdings of each country. Here is the top 100:

blog11_jul_15.4.gif

Embattled media baron Rupert Murdoch may be “just getting annoyed” at all the recent negative press, but his UK CEO resigned today and his newspapers are starting to run apologies to the British people. It seems to me that Murdoch has bigger fish to fry in the US now that the FBI is beginning a US investigation into possible phone hacking there. If discovered, he will be headed straight to prison with a lifetime sentence. This situation is shaping up to be much bigger than WikiLeaks. If sent to prison, can you possibly imagine how much poop on the elite class that Murdoch would be prepared to disclose?

Sounds like a popular movie to be released this summer.

Have a good 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 2,627.00 3:39AM EDT Down 23.00 (0.87%) Components, Chart, More
^BFX BEL-20 2,430.28 6:59AM EDT Down 9.22 (0.38%) Components, Chart, More
^FCHI CAC 40 3,733.70 6:59AM EDT Down 17.53 (0.47%) Components, Chart, More
^GDAXI DAX 7,186.64 6:45AM EDT Down 28.10 (0.39%) Components, Chart, More
^AEX AEX General 329.84 6:45AM EDT Down 0.62 (0.19%) Components, Chart, More
^OSEAX OSE All Share 463.41 6:44AM EDT Up 0.87 (0.19%) Components, Chart, More
^SMSI Madrid General N/A 0.00 (0.00%) Chart, More
^OMXSPI Stockholm General 342.73 6:44AM EDT Down 3.39 (0.98%) Components, Chart, More
^SSMI Swiss Market 5,935.32 6:44AM EDT Down 45.65 (0.76%) Components, Chart, More
^FTSE FTSE 100 5,842.95 6:44AM EDT Down 4.00 (0.07%) Components, 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

Good evening. Patrick here.

Staggered by a week of intense pummeling the wobbly Bull staggered over to his corner, hoping to shake off the cobwebs and return for the 15th and final round of this heavyweight championship bout.

The Bulls successfully defended – at least thus far – the 50% retracement (appox. 1306) of the recent rally, prices turning up strongly in the last 30 minutes of trading and closing near session highs (S&P+0.56%).

In an uptrend equities begrudgingly give ground; corrections respecting 50% retracement levels are the types of stocks traders should look to buy on dips. This one simple rule can keep can keep on the right side of a trade; stocks making higher highs and higher lows never giving back more than half of their gains in any given swing are the stocks you want to own.

The equity market took a lot of body blows all week, amazingly closing more than 1% below intraday highs in four consecutive sessions. O Bag of Wind and the Bearded One were front and center for days on end, economic woes, worsening employment numbers, bickering on Capital Hill over budget cuts and spending, and the European sovereign debt situation dominating the nightly news.

A market holding support in the face of bad news; if the S&P closes back above 1320 the Bulls may have dodged another bullet.

Have a great weekend.


  1. http://on.ft.com/mRcFEf Following in the footsteps of... [#89498]
    By: Mark H (1363 comments) Go to top ↑

    http://on.ft.com/mRcFEf

    Following in the footsteps of Marathon Oil. According to the article, its spun-off refining operations will be only slightly smaller than Valero’s which is the biggest refiner in North America.

    • I don't see the sum of the parts being more valuable than... [#89499]
      By: mayhem991 (199 comments) Go to top ↑

      I don’t see the sum of the parts being more valuable than the whole in an integrated operation like Conoco.

      • Nomura's analyst hits the nail on the head when he says the... [#89500]
        By: Mark H (1363 comments) Go to top ↑

        Nomura’s analyst hits the nail on the head when he says the cost of upgrading refineries is a significant drain on capital. I would say this demerger is about accelerating growth in the E&P side of the business with that burden gone.

  2. http://on.ft.com/oUu6Hx Listen carefully, he really did... [#89501]
    By: Mark H (1363 comments) Go to top ↑

    http://on.ft.com/oUu6Hx

    Listen carefully, he really did say that Italy has a primary budget surplus.

  3. Good morning. 08:30 CPI (-0.2%) 08:30 Empire... [#89502]
    By: Bull Hunter (3552 comments) Go to top ↑

    Good morning.

    08:30 CPI (-0.2%)
    08:30 Empire Manufacturing (-3.76)
    09:15 Industrial Production
    09:15 Capacity Utilization
    09:55 Mich Sentiment

    ——

    CHRW – C.H. Robinson initiated with a Neutral at Susquehanna. Target $80

    GOOG – Coverage Resumed @ Needham with a Buy. Target $725

    GOOG – PT Lifted from $650 to $$690 @ Oppenheimer. Outperform

    GOOG – PT Lifted from $680 to $725 @ Collins Stewart. Buy

    KGC – Kinross Gold initiated with an Overweight at HSBC.

    NE – Noble Corporation upgraded to Buy from Hold at Jefferies based on signs of improvement in the offshore drilling cycle and a modest pricing recovery. Price target raised to $48 from $45.

    TCK – Teck Resources upgraded to Outperform from Market Perform at BMO Capital
    based on higher metallurgical coal forecasts. Price target raised to $60

    ——

    “Blessed are the young, for they shall inherit the national debt.”
    ~ Herbert Hoover

  4. check yer stocks for the lucky number... [#89503]
    By: Les (7233 comments) Go to top ↑

    check yer stocks for the lucky number pin:

    http://www.optionpain.com/MaxPain/Max-Pain.php

    • Les, have you found this to be useful? From my experience... [#89505]
      By: Tbolt (169 comments) Go to top ↑

      Les, have you found this to be useful? From my experience, only about 10-20% of my options end at max pain.

      • No, like anything Tbolt it's just a price potential. I did... [#89506]
        By: Les (7233 comments) Go to top ↑

        No, like anything Tbolt it’s just a price potential. I did use it to quickly peak at GOOG’s max pain price, which along with the bollinger band busting breakout (say that three times fast) after hours, is likely to present me with a parabolic reversal setup today.

        Just another piece of the puzzle and I guess for shorter-term traders like myself.

        However, Obama is reportedly going to speak today at 11am regarding a solution to the budget impasse. This event could create some volatility which big money may use to hit traders with.

        • There are so many factors that could influence a stock... [#89509]
          By: Tbolt (169 comments) Go to top ↑

          There are so many factors that could influence a stock price on any given day. I just haven’t found Max Pain to be that useful. I wish it were. The concept is enticing.

  5. FCX - FCX is a fresh Buy at Bank-of-America-Merrill... [#89504]
    By: Bull Hunter (3552 comments) Go to top ↑

    FCX – FCX is a fresh Buy at Bank-of-America-Merrill Lynch.

    GOOG – PT Lifted from $680 to $790 @ RBC. Outperform

  6. ... [#89507]
    By: Mark H (1363 comments) Go to top ↑
  7. BRCM - PT Lowered from $44 to $40 @ Needham... [#89508]
    By: Bull Hunter (3552 comments) Go to top ↑

    BRCM – PT Lowered from $44 to $40 @ Needham. Outperform

  8. *(US) JULY PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE:... [#89510]
    By: Vadym Graifer (4341 comments) Go to top ↑

    *(US) JULY PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 63.8 V 72.0E (lowest since March 2009)
    - 1 yr median inflation expectations at 3.4% v 3.8% June final (lowest since Feb 2011)
    - 5 yr median inflation expectations at 2.8% v 3.0% June final (lowest since Dec 2010).

  9. (US) US House to vote on a plan for $2.4T debt ceiling... [#89511]
    By: Vadym Graifer (4341 comments) Go to top ↑

    (US) US House to vote on a plan for $2.4T debt ceiling increase with equal amount of cuts next week, will include balanced budget amendment with provisions to ‘cut, cap, and balance’ – financial press
    - Reminder: Yesterday the White House reiterated that President Obama does not support a constitutional amendment mandating a balanced budget
    - Note: US House Speaker Boehner (R-OH) had included the possibility of an amendment to be included in the negotiations as a condition for passing an agreement on the debt ceiling; pundits have anticipated that this condition will receive no democratic support, as Democrats claim it is an inflexible framework to handle Govt needs on crises, among other issues

    • ... [#89524]
      By: kaimu (3289 comments) Go to top ↑
      • Can we draw any other conclusion from the supposed debt... [#89526]
        By: Craig (2014 comments) Go to top ↑

        Can we draw any other conclusion from the supposed debt ceiling debate/kabuki theater than Kaimu’s ‘human condition’ argument and Bill’s ‘monitization’ calls are the only path the international parasitic banking elite and their leech political mouth pieces will choose?
        The international parasitic banking elite will never choose saving anything or one but themselves, even if they kill the host(s), and the people elected to control the parasites have become enabling parasites themselves.

        AAMOF, I think $5000 gold may be a conservative estimate. I also think Bill’s long ago call for a G-20 currency pact will be the only way out and all indebted countries (and their dependent creditors) will agree to blanket debt reduction through monetary measures.

        The world is a banana republic. The exceptions, ironically, may be China and Russia as they have little debt. Our forefathers are turning in their graves and Marx is having a Vodka party. They always said we would sell the rope used to hang ourselves. I think we buy it back with borrowed money….

        • Yes, the debt ceiling debate is nothing more than a kabuki... [#89528]
          By: OldVet (15 comments) Go to top ↑

          Yes, the debt ceiling debate is nothing more than a kabuki theater act. They are having a hard time trying to cut 4 trillion over 10 years, which amounts to about 400 billion per year. The annual deficit is running between 1.5 – 1.7 trillion so how are these idiots going to come to an agreement for the other trillion dollars? At this point, even if they do cut some dollars it isn’t going to be enough to balance the budget and the USA will loose their AAA rating. All of these idiots in Washington should be thrown out in the next election(s).

        • ... [#89531]
          By: Grym (5469 comments) Go to top ↑
          • Grym, As you know, there was a previous time when we had... [#89534]
            By: Craig (2014 comments) Go to top ↑

            Grym,
            As you know, there was a previous time when we had too many people – “workers”.
            At that time most American workers were farmers and the government wanted to move those workers out of the way to make way for young people to take those jobs. This, along with the other problems of the Great Depression, made Social Security possible. Young (in most cases more productive) workers took those good paying jobs for longer at a rate that made SS feasible and with a much larger ratio of workers to retirees.

            Maybe the answer is to make it more possible for some of the baby boomers, the proverbial pig in the python, to retire? If not through SS, maybe by declaring all retirement accounts tax free, which would technically increase the longevity of those accts by at least 30% AND increase spending, which would also help the economy.

            I bet it would be far less expensive then rescuing the zombie parasitic bankers. If we are going to stimulate the economy, maybe we need to think outside the box and try to kill more birds with the stones we have?
            30% of BB retirements is a lot of cash. It’s just a thought, I’m almost positive a lot of folks will tell me why I’m crazy. I say they should all have tax free retirements. They earned the money.

          • Oh never mind, I like the idea of investing in Tractor... [#89535]
            By: Craig (2014 comments) Go to top ↑

            Oh never mind, I like the idea of investing in Tractor Supply. They will very likely be selling the guillotines, tar, feathers, torches and rope that will surely be in high demand. Do they sell ammo?

  10. AAPL - estimates increased at Jefferies through 2012... [#89512]
    By: Bull Hunter (3552 comments) Go to top ↑

    AAPL – estimates increased at Jefferies through 2012. Company is seeing higher sales across the board. Buy rating and $500 price target.

    GOOG – estimates upped at Credit Suisse through 2013. Company is realizing higher sales growth. Outperform rating and $700 price target.

    GOOG – target boosted at Morgan Stanley to $655. Sales growth is accelerating. Equal-weight rating.

    GOOG – estimates, target raised at Citigroup. Shares of GOOG now seen reaching $690. Estimates also raised on accelerating revenue growth in the US, UK, and ROW. Hold rating.

    INTC – estimates increased at BMO through 2012. Company is seeing higher sales and margins. Outperform rating and $27 price target.

  11. (EU) Hearing SocGen analyst note from earlier that... [#89513]
    By: Vadym Graifer (4341 comments) Go to top ↑

    (EU) Hearing SocGen analyst note from earlier that discussed possible “near fail” banks being recirculated in the last few minutes ahead of stress test results
    - SocGen note this morning identified Deutsche Bank, Commerzbank and Banco Popular as potential near fails in the EBA stress tests due out at 12:00ET

  12. ... [#89514]
    By: Craig (2014 comments) Go to top ↑
    • http://www.youtube.com/watch?v=wh9AC0jCGjY Everybody knows... [#89516]
      By: pulse (324 comments) Go to top ↑

      http://www.youtube.com/watch?v=wh9AC0jCGjY

      Everybody knows that the dice are loaded
      Everybody rolls with their fingers crossed
      Everybody knows that the war is over
      Everybody knows the good guys lost
      Everybody knows the fight was fixed
      The poor stay poor, the rich get rich
      That’s how it goes
      Everybody knows
      Everybody knows that the boat is leaking
      Everybody knows that the captain lied
      Everybody got this broken feeling
      Like their father or their dog just died

      Everybody talking to their pockets
      Everybody wants a box of chocolates
      And a long stem rose
      Everybody knows

      Everybody knows that you love me baby
      Everybody knows that you really do
      Everybody knows that you’ve been faithful
      Ah give or take a night or two
      Everybody knows you’ve been discreet
      But there were so many people you just had to meet
      Without your clothes
      And everybody knows

      Everybody knows, everybody knows
      That’s how it goes
      Everybody knows

      Everybody knows, everybody knows
      That’s how it goes
      Everybody knows

      And everybody knows that it’s now or never
      Everybody knows that it’s me or you
      And everybody knows that you live forever
      Ah when you’ve done a line or two
      Everybody knows the deal is rotten
      Old Black Joe’s still pickin’ cotton
      For your ribbons and bows
      And everybody knows

      And everybody knows that the Plague is coming
      Everybody knows that it’s moving fast
      Everybody knows that the naked man and woman
      Are just a shining artifact of the past
      Everybody knows the scene is dead
      But there’s gonna be a meter on your bed
      That will disclose
      What everybody knows

      And everybody knows that you’re in trouble
      Everybody knows what you’ve been through
      From the bloody cross on top of Calvary
      To the beach of Malibu
      Everybody knows it’s coming apart
      Take one last look at this Sacred Heart
      Before it blows
      And everybody knows

      Everybody knows, everybody knows
      That’s how it goes
      Everybody knows

      Oh everybody knows, everybody knows
      That’s how it goes
      Everybody knows

      Everybody knows

      Craig;

      I LOVE the balance of RP/DK. IMO this is the only way out. Drop the petty divisions and unite for a moral code which is not legislated or judged by crooked administrations, merely LIVED by people. People, who will soon recognize the scope of all the deceptions, must shun these deviants who have thrived in the “He’ll do anything to get ahead” world.

      The next generations must know that we stood for just causes and we will not allow these evil seeds to continue their terrorism. The pursuit of happiness is not negotiable. Those who wish to dominate with no responsibility for contribution are to be removed from any sphere of influence in pursuit of social equity.

      pulse

      • Fantastic song, though my favorite version is by Nick... [#89536]
        By: Zed II (163 comments) Go to top ↑

        Fantastic song, though my favorite version is by Nick Cave-done as an homage to the master.

        Ciao, Z.

    • Craig, You pays your money and takes your choice... cynic... [#89518]
      By: Grym (5469 comments) Go to top ↑

      Craig,

      You pays your money and takes your choice…

      cynic |?sinik|
      noun
      a person who believes that people are motivated purely by self-interest rather than acting for honorable or unselfish reasons

      realism |?r???liz?m|
      noun
      the attitude or practice of accepting a situation as it is and being prepared to deal with it accordingly;
      the view that the subject matter of politics is political power, not matters of principle : political realism is the oldest approach to global politics.

      Grym

    • From the 'left' some recent observations of the RP/DK... [#89520]
      By: pulse (324 comments) Go to top ↑

      From the ‘left’ some recent observations of the RP/DK cohesion fighting the MIC (she is highly controversial, but usually demonstrates a thorough understanding of the many angles of perversion present in our dumbocracies today.)

      http://emsnews.wordpress.com/2011/03/21/us-and-eu-

      http://emsnews.wordpress.com/2011/02/09/patriots-d

      http://emsnews.wordpress.com/2009/07/27/trilateral

      Also, before we all condemn the ‘private’ Federal Reserve’s evolution, we may want to familiarize ourselves with the Exchange Stabilization Fund.(I had hoped Kaimu would review the content of Eric’s studies on this topic. Other opinions are always appreciated.)

      http://www.marketskeptics.com/2011/06/the-esf-and-

      pulse

    • ... [#89519]
      By: Grym (5469 comments) Go to top ↑

      wihdrawn

    • Thanks for that post Craig. In the spirit of your subject... [#89527]
      By: Johnny (1181 comments) Go to top ↑

      Thanks for that post Craig.
      In the spirit of your subject line. I am nearly finished the best book I’ve read in 2011 and highly recommend it. It’s a brief history of NYMEX and commodities traders.
      “The Asylum” Leah McGrath Goodman http://tinyurl.com/6jrxm7o
      –The Renegades Who Hijacked the World’s Oil Market
      FD: My son bought me the book, I have no association with the author or anyone else.

    • The few congressmen who actually represent the citizens are... [#89533]
      By: Zed II (163 comments) Go to top ↑

      The few congressmen who actually represent the citizens are now referred to as “extremists”, left or right.

      Tell’em Dennis!

      Ciao, Z.

  13. The Government shut down as the Subject dates above... [#89515]
    By: George (619 comments) Go to top ↑

    The Government shut down as the Subject dates above indicate per this article:

    http://www.usatoday.com/money/perfi/columnist/wagg

    Here is a chart of the Dow from 12/1/1995 through 1/31/1996:

    http://tinyurl.com/69v46tk

    The short article goes on to point out the difference between a shutdown and a default.

    Well just for the heck of it. Here’s the chart for $GOLD during the same time.

    http://tinyurl.com/689yggh

  14. They couldn't complete their mandate on setting position... [#89517]
    By: JimG (299 comments) Go to top ↑

    They couldn’t complete their mandate on setting position limits and now

    “CFTC Will Postpone Dodd-Frank Regulations for $601 Trillion Swaps Market”

    http://tinyurl.com/6b2peon

  15. ... [#89521]
    By: Vadym Graifer (4341 comments) Go to top ↑
  16. The Facts of Life from Ron Paul... [#89522]
    By: prodisc (73 comments) Go to top ↑
  17. is solar... 3 out of 4 US jobs are housing related... [#89525]
    By: baz22 (2875 comments) Go to top ↑

    is solar… 3 out of 4 US jobs are housing related.. Stimulas ? betting Q3 ( ‘ Cupcake ‘ ! ) will directly/indirectly be focused on housing .. think thin=film, not poly.. residential/commercial, not industrial… rooftop flex.. just released 16% efficency passes FSLR…

  18. http://stockcharts.com/freecharts/candleglance.htm... some... [#89529]
    By: Les (7233 comments) Go to top ↑

    http://stockcharts.com/freecharts/candleglance.htm

    some other groups to peruse before close

    http://stockcharts.com/freecharts/candleglance.htm

    http://stockcharts.com/freecharts/candleglance.htm

    http://stockcharts.com/freecharts/candleglance.htm

    sticking to my discipline and holding here. Added to SLW Sep 40 calls on the dip earlier in the day. Still long POT Aug 60 calls. Short GOOG with Aug 500 puts. Picked em in the bargain basement bin @ 2 for $100 after they took a 95% haircut – OUCH!. Presently up 50%. Trying for a test of support to cover into. We shall see.

  19. Many people assume that at some point business as usual... [#89532]
    By: Freedom57 (155 comments) Go to top ↑

    Many people assume that at some point business as usual (BAU) will return to America, and with it plentiful jobs and prosperity for the masses. I do not hold that belief. I use GE as a model for American and worldwide business practices. In my analysis, maximization of corporate profit is in conflict with economic opportunity for the masses. This is due to the drive for productivity increases, with disproportionate allocation of the productivity gains to the owners of capital versus the workers.

    “Here, hundreds of engineers and scientists spend their days figuring out how to help GE’s factory do more with less: less time, less metal and, less labor.”
    http://finance.yahoo.com/blogs/daniel-gross/ceo-im

    What the writer left out was that GE also employs hundreds of lawyers and financial experts to maximize profits and minimize costs of regulatory burdens and taxation. I pass no judgement on this; it’s simply the methodology that successful enterprises use in our systems. And of course they employ lobbyists, the chief of which is Jeff Immelt himself who has become Obama’s leader on his jobs council. Irony.

    It is my belief that a form of predatory corporatism has evolved worldwide. Productivity and financial “clout” are the keys to survival in this system. The larger players are best equipped to bargain with various countries, states/provinces, and municipalities for the establishment and/or continuation of their operations. All around the world people want jobs and are often willing to sacrifice environment, long term stability, etc. to lure a businesses promising jobs to their community.

    Productivity. We all know everyone can’t be above average intelligence. We also know everyone can’t be better than the average driver. But we seem not to know that all countries cannot be net exporters able to “move forward” (a phrase I have come to detest) with a “growth economy” (nearly as bad).

    So there is arbitrage around the world to minimize costs related to labour, taxation, and regulations. Capital and manpower will slosh around wherever the latest, biggest, best, and above all, most profitable opportunities arise. All this is set against a backdrop of rising commodity costs, especially energy, which cannot be legislated away. The Laws of Thermodynamics cannot be repealed by Congress.

    There is nothing new about productivity increases. It is an inherent and necessary ingredient for growth in our system. When I was on the farm in the 1950s we used to have threshing crews that went from farm to farm (stooking was a basic skill back then), and we hauled grain from the field in wooden wagons pulled by a team of Clydesdales. Hitching a team of Clydes was also a basic skill in the farm economy.

    In 1968 I worked at a Dome Petroleum natural gas processing plant as a summer student. There were three process operators per shift. When I returned in 1969 there was a nifty new air-conditioned control room, but only one process operator per shift. Productivity gains.

    In the 1970s I observed consolidation and productivity increases in businesses like meat processing plants, breweries, sawmills and refineries. I spent time in the forestry sector; mechanized harvesting largely replaced manual tree felling by the end of the decade.

    One of my brother-in-laws started as a junior field engineer in the Alberta oil patch in the early 1970s and showed me a small processing installation he supervised the construction of, almost entirely automated. All the signals from this facility and many others went to a control room in Edmonton, where decisions were made. The brother-in-law retired last year after his last big job, at the Firebag site north of Fort McMurray. The technology we thought cutting edge in the 1970s is now considered outmoded or at best rudimentary.

    I first used a personal computer in 1980, but had to write my own programmes for the projects I was working on. I can now do on a spreadsheet in minutes what took me hours or days to programme three decades ago.

    In the 1980s we had several brokerages in town, most with a group of a dozen or more registered representatives (salesmen with titles), who we relied on to provide us with quotes and place our orders over the phone. A small group of retiree traders hung around each brokerage all day watching the ticker and placing the occasional order. (My first stock purchase in the 1970s cost $80 commission at a full service brokerage; now I can place the same order for $1 on IB.) In the late 1980s I asked my youngish rep at Richardson Securities if he was concerned about being replaced by automation. He wasn’t. The Richardson Securities registered reps are long gone, as are those of the other brokerages. Jobs in securities are down; jobs in security are up.

    Everyone understood automation replacing labour in manufacturing facilities. But some of my acquaintances in the professions were caught off guard when it caught up with them. It is almost as easy to get an engineering design done in Bangalore, and e-mailed to your office as it is to get it done at the pricy shop across town. And price matters. Some law firms have found they can get legal briefs done in India (day for them, overnight for us) with every bit of professionalism that we can produce, and cheaper than an articling student even. And price matters.

    And the beat goes on . . . We all have our individual remembrances from the past. Grym and others have provided good data points from their past.

    Can it be that we have reached the point where productivity enhancements have allowed us to satisfy demand for goods and services worldwide, while also decreasing the employment rate, as I believe? Demand is dependent on ability to purchase. The ability of the average citzen to purchase in the developed nations has been stimulated and stretched to the snapping point by the substitution of debt for savings. And in the long run unemployed people have neither earnings nor access to credit, which is creeping out Obama and Bernanke big time.

    Productivity growth combined with debt growth does wonders for the corporate bottom line. But that does not necessarily translate into wealth creation or increased earnings for the majority of citizens.

    A body in motion will stay in motion unless acted on by an external force (Newton’s first law of motion). I see no external force at present or in the near future that will slow down the concentration of wealth and earnings in countries like Canada and the US. But at some point the system collapses when the wealth disparity gets too large; the “little people” no longer have discretionary income. I think this point will be approximately coincident with the point where online sales of guillotines take off, accompanied by demands that Congress do something about rising costs of tar, feathers, and rope ;-)

    • Freedom: A very erudite commentary... thank... [#89537]
      By: dnfrm (88 comments) Go to top ↑

      Freedom: A very erudite commentary… thank you.

    • Great post Freedom, lot's to think... [#89541]
      By: Johnny (1181 comments) Go to top ↑

      Great post Freedom, lot’s to think about.

    • ALOHA!! Thanks for the trip down memory lane ... Yet when... [#89542]
      By: kaimu (3289 comments) Go to top ↑

      ALOHA!!

      Thanks for the trip down memory lane …

      Yet when I think of “productivity” I think of it like a commodity … supply and demand. The market will seek out the most efficient and profitable pathway to meet its labor needs(demand). If that means moving factories to China then so be it as that is where the supply is!

      I personally do not think there will be any way around Americans taking a severe lifestyle reduction. It’s coming whether you want it or not. Of course that hit will be much less severe if you have no debt.

      • Kaimu writes: "Yet when I think of "productivity" I think... [#89548]
        By: Craig (2014 comments) Go to top ↑

        Kaimu writes:
        “Yet when I think of “productivity” I think of it like a commodity … supply and demand. The market will seek out the most efficient and profitable pathway to meet its labor needs(demand). If that means moving factories to China then so be it as that is where the supply is!”

        “I personally do not think there will be any way around Americans taking a severe lifestyle reduction. It’s coming whether you want it or not. Of course that hit will be much less severe if you have no debt.”

        I completely agree with the debt comment, but as Kaimu notes in his comment, there is both supply and demand. We may not control supply of productivity, but we do control demand for the product of that supply.

        In order to remain free of debt and to gain some degree of control, it is time to refrain from spending on these products and live within our means. We still grow a lot of food in this country and we still have a lot of raw commodities and a few decent American products. We have a lot of great services (it’s about all we have) and we have a lot of skilled people.
        As some of wrote earlier this week, it is time to shop locally, do business with local community businesses and to seize more control of demand. We still have a lot of wealth and if we vote wisely with it we can arrest the great transfer of wealth and help stop the transfer of capital and wealth out of the country. We had better turn inward and take care of our own or we will surely see the destruction of our country.
        It really should start with transferring money from the big banks and moving it to local small banks and credit unions. Buy groceries and produce locally from your farmers markets and breads and baked goods from your local bakery.
        There are a lot of farmers that sell all kinds of produce, beef, eggs, chicken, etc. that are raised under much healthier conditions than the multinational factory farms. Really THINK about what you buy, where you buy it and what you really need. When you think about it, it will help us return to what is really important in life. Family, friends and community.
        I ask, what do the Chinese make and sell at Walmart we really need?
        Clearly some of the trappings of our supposed lifestyle are not necessities.

        I’m reminded of the natives trading Manhattan for some beads and trinkets.
        Do we really want to trade our country and souls for shiny iPhones, IPads and cheap junk from China? Heck, even the beads and trinkets didn’t require a $100 a month data plan and take endless hours of productive time surfing the web and texting! The only reason we have lost control is we GAVE IT AWAY. It’s time to take back control of our lives! Besides, won’t it be a shock when kids have to actually learn to verbally communicate? That by itself would be worth it.

    • Great comment Freedom ! Many millions of Americans who are... [#89544]
      By: MoKat (531 comments) Go to top ↑

      Great comment Freedom !

      Many millions of Americans who are semi-conscious are becoming aware that their standard of living is eroding.
      Many cling to hope that prosperity will return. They will become more and more conscious of the erosion of the purchasing power of their income.

      Growing Wealth Inequality

      The world’s net worth is an estimated $58 Trillion. The top 5% control $41.7 Trillion of total assets. The top 1% control $25 Trillion. The bottom 80% control $4 Trillion.

      Here’s a good comment on global wealth >zero hedge.

      ‘Wealth destroys democracy and free markets when it buys the machinery of governance’

      http://www.zerohedge.com/article/guest-post-made-u

      • ALOHA!! 'Wealth destroys democracy and free markets when... [#89553]
        By: kaimu (3289 comments) Go to top ↑

        ALOHA!!

        ‘Wealth destroys democracy and free markets when it buys the machinery of governance’

        How many people alive here in 1940 when Ida May got her first social security check knew that the Social Security Trust Fund would end up being just another “debt machine” for the politicians to buy votes and extend the power of their political monopoly? So Ida May who contributed only $24.75 to the Social Security scheme walked away with $23,000, a 92,000% gain. Is that efficiency or just plain Ponzi? If you have half a brain then you will figure it out. Its nothing close to a “safety net” its a “destruction net” and now the net has been thrown around the newest generation to ensnare the fruits of their labor. I would hope this new generation would be smarter than all the preceding ones, but then so far people have been voting for the same political monopoly without hesitation for 100 years now. Only cosmetics ever get debated. Now that’s the definition of CRAZY!

        So when we redirect our capital to government in destroys value. I have shown the scale of that VALUE DESTRUCTION with my charts. Every week and every month an APPLE and an EXXON are destroyed. Well, it not only destroys capital but it also destroys the future returns on that capital. It goes back to Bastiat’s Broken Window … The vast inefficiencies of government largess should be the focus of every citizens vote. Or are we so dumbed down and vane that we actually think everyone will get their cake and eat it too?

        So when you are forced to “donate” your 6.2%(4.2% for 2011) portion of Social Security from your hard-earned wages think of Bastiat. Then the employer matches that 6.2% and it becomes 12.4% of your total human output, your labor and your bosses labor. Would it not be better to redirect that 12.4% to your own uses or CAPEX for your boss to build his business instead of destroy it? They need to rename Social Security and make the name what it really is MONOPOLY SECURITY!

        Now Social Security is just a small portion of your total contributions to malinvestment. You have your income tax, excise tax, gas tax, sales tax, estate tax, phone tax, gift tax, utility tax and on and on and on. Some of those taxes go to the State, county and city but the majority goes to Washington DC. They take your “money” and make it theirs and it is basically extortion, where you are forced to pay for protection just like the Mafia. Only supposedly you “vote” to be extorted! I mean is that the ROYAL FLUSH or is that the ROYAL FLUSH? The entire system makes the Mafia look like kindergarten teachers! Then they ruin you further when they made the FEDERAL RESERVE a lawful monopoly. Its not enough that your taxes are taken but they have to devise a monetary system that robs you blind the longer you hold it. Pure PONZI from the top down!

        Poor NASA! A victim of its own innovation … With NASA out of the way that frees up many more billions politicians can use to save banks and GM with. Had NASA used it resources to devise an even more fraudulent monetary system it would have been spared. Instead it was just a bunch of scientists trying to advance human knowledge and understanding of our planet and our universe. Not much MBA or 30% rates or votes in that lot!

        I keep thinking about how it is we went to the moon in 1968 and yet we still have this same old antiquated corrupt money system. None of that computes one bit! When we go to the Toyota showroom do we look for the most useless car they produce and then pay a huge premium to buy it? When we go to the grocery store do we look for the most rotten fruit to buy? When we look for a computer to replace the old gazillion bit one we now have do we look for the one that still runs DOS and has a floppy drive? Our monetary system runs DOS and in fact it is worse. It still has a slide rule as its motherboard! Why do we settle for money that has no value other than a medium for unlimited debt and destruction? How long do you think the current Congress and the US FED would last if they actually had to compete in real free markets where they did not have the privilege of hiding behind legalized corruption? I would say they would last about as long as a “DC nano-second”, which is actually a “nano-hour”! Nothing is efficient in DC not even time!

        • We have the same old corrupt money system because - aside... [#89558]
          By: davefairtex (5215 comments) Go to top ↑

          We have the same old corrupt money system because – aside from a few cranks like you – the only people who know how it works are those whom it benefits. Money is also a moderately complex topic, which doesn’t lend itself to understanding within a 30 second sound bite. Lastly, who would possibly benefit from exposing such a system? Bankers? Economists employed by the bankers?

          Perhaps we should start a reality TV show. That might work. But who would fund it?

    • Great discourse F57. You knocked the hide off the ball on... [#89545]
      By: Illini (672 comments) Go to top ↑

      Great discourse F57. You knocked the hide off the ball on that one.

    • Great piece, F57. With all of the improvements in... [#89546]
      By: Dave M (437 comments) Go to top ↑

      Great piece, F57. With all of the improvements in productivity leading to high unemployment and greater disparity in wealth distribution, it is time for society to begin examining a shorter workweek, such as a 4 day week. The standard workweek was once 6 days a week – maybe its time to put the 5 day week out to pasture. Even in 1956, then Vice-President Richard Nixon talked about a 4-day week as being a goal for all Americans. I have attached a link to an article in Life Magazine from January 8, 1971, for those who like to venture into memory lane, called “The 4-Day Week Catches On”, which profiles some businesses that adopted the model 40 years ago. Complete with Marlboro and Ford pick-up truck ads.

      http://tinyurl.com/6dc555r

    • Most enjoyable Freedom. I immediately thought of one of the... [#89549]
      By: Les (7233 comments) Go to top ↑

      Most enjoyable Freedom. I immediately thought of one of the great productivity improvements of the past which did little to facilitate mass wealth initially. By imposing punitive tariffs or other such measures on fabric weavers in India were the noncompetitive mills of England able to get a leg up in this manufacturing sector in the industrial revolution. Anyone who has read a Dickens novel or watched a BBC period drama will recall it was not a happy time of prosperity, unless you were the owner of capital.

      War, hunger, economic hardship and political reform – these were issues directly affecting the former empire of England and led to some bloody confrontation between state and citizen. http://en.wikipedia.org/wiki/Peterloo_Massacre.

      No doubt we will see a redux around the world to varying degress depending on hardships endured. I recall the slave wage of dockworkers on Australia’s waterfront at the beginning of the 20th Century which led to union militancy and the rise of collective bargaining, which has come full circle with deregulation…. you get the picture.

      My ‘issue’ with Kaimu’s content is that it addresses institutional change, something the world has experienced ceaselessly and we do but turn full circle. Of course smashing that banking cartel is a 1st step. I’m more interested in change as hinted at in the article you linked, which reads as follows:

      “The plant is also a showcase for GE’s “teaming” concept, a flat management style in which workers make decisions by consensus and are largely responsible for their own work. (Imagine a highly efficient, precisely run commune.)”

      This organisational style is based on highly motivated people able to work collectively for improved outcomes and gains. I believe that is something that can be replicated at the political level, down to grassroots local politics but requires a) changing the measure of value that determines our commmunity and its well being and b) rebuilding the institutions to create an aesthetic life experience for the majority. CHANGE THE PARADIGM!

      http://www.youtube.com/watch?v=zDZFcDGpL4U

      “fully alive” – something I realise everytime I enter my Aikido dojo.

  20. ALOHA!! Snap-p-p! Well, a few years or so ago I mentioned... [#89538]
    By: kaimu (3289 comments) Go to top ↑

    ALOHA!!

    Snap-p-p!

    Well, a few years or so ago I mentioned what might happen if the US sovereign credit was downgraded and here it is in our face. I mentioned that according to S&P when they downgrade sovereign debt it also applies to all corporations based in that country. Perhaps this is why Haliburton moved to Dubai! You could see an exodus of US corporations moving out of America taking high level jobs with them. Also all our credit cards and loans are tied to US Treasury rates so that would be a big negative for anyone with a lot of debt who cannot legally print money. If you thought Communism was the ultimate DOMINO THEORY then you have not seen DEBT DOMINOES in action! For sure in this scenario the REPS debt ceiling bluff is being called. How many of those Republican Senators retirement portfolios would be at stake?

    Essentially here we have Wall Street threatening the US Congress yet again!

    S&P threatens downgrade of U.S. finance companies
    reuters

    Friday July 15, 2011, 3:43 pm

    NEW YORK (Reuters) – Standard & Poor’s on Friday raised the pressure on Washington debt negotiators, saying it could downgrade insurers, securities clearinghouses, mortgage agencies and a laundry list of other firms if there is not a deal soon to lift the debt ceiling and cut the deficit.

    The ratings agency singled out Fannie Mae (OTC BB:FNMA.OB – News), Freddie Mac (OTC BB:FMCC.OB – News) and the Depository Trust Co, which facilitates payment transfers among major banks. Its action also affected some fixed-income, exchange-traded and hedge funds and some Federal Home Loan Banks and Farm Credit System Banks, among a list of others.

    S&P characterized its targets as “entities with direct links to, or reliance on, the federal government.”END

    Wow … that US government guarantee isn’t worth the paper it was written on! Just think how pissed the Chinese and Japanese will be when their $trillion$ GSE entitlement goes to $0!

    Hummm … “entities with direct links to, or reliance on, the federal government.” Well, that list would include most of the Fortune 500 companies who in some way or another either have direct contracts with the US government or indirect ones. Let me tell you as a former high end Public Works contractor that list includes some giant companies like 3M, GE, Oracle, Microsoft, Apple and the list is long … Just think of all the materials goods and services required to build and maintain infrastructure like schools, prisons, bridges, military equipment, etc.

    The LIABILITY BUBBLE is alive and doing extremely well …

    • kaimu - "entities with direct links to, or reliance on... [#89539]
      By: Dr. Strangelove (2004 comments) Go to top ↑

      kaimu -

      “entities with direct links to, or reliance on, the federal government.”

      Certainly, the banks qualify but how do you downgrade zero interest (free money)?!

      • ALOHA!! " ... how do you downgrade zero interest (free... [#89540]
        By: kaimu (3289 comments) Go to top ↑

        ALOHA!!

        ” … how do you downgrade zero interest (free money)?!

        By raising the interest rates(FFR)! HA!! That’s what Volcker did! How else do you convince gold and silver hoarders to cut lose of their bullion other than COMEX “magic”(illegalize it)! It’s just too bad the US Treasury did not have the same debt it had back in 1980! In June of 1980 the US PUBLIC DEBT was at $925BIL. In April 1977 the US PUBLIC DEBT was only one TARP … $700BIL! In 1980 we were at our maximum zenith for manufacturing jobs and it has been literally downhill ever since 1980; now we are down to manufacturing job levels of the Depression(1940).

        Do you think that if the US TREASURY and the US FED were serious about a STRONG DOLLAR POLICY that they would have raised rates long ago? This shows they are not serious about a STRONG DOLLAR POLICY but they are dead serious about a STRONG DEBT POLICY! Each day that passes more and more of the masses are catching on to the conjob of money.

        I read Gary Shilling pontificate his view that US Treasuries are the best bet, but then what else do you expect a US Treasury salesman to say? He essentially reverted to that very tired old saying about the “lesser evils”! My God, is that what this country and this World has turned into … LESSER EVILS? It is my experience that LESSER EVILS lead to GREATER EVILS and in very short order GREATER EVILS become prime USDA 100% EVIL-EVIL!!

        IT IS WHAT IT IS …

  21. ... [#89543]
    By: Jack Senett (438 comments) Go to top ↑

    Above.

  22. It's striking how the smaller shale oil companies in this... [#89547]
    By: Illini (672 comments) Go to top ↑

    It’s striking how the smaller shale oil companies in this scan were so far ahead of the other oils:

    http://www.finviz.com/screener.ashx?v=161&t=XOM,CV

    I did do well today with PXD,GEOI,BEXP and even the new MRO. It was lucky that I bought earlier this week but I am still looking forward to better times when the oil shales start producing big time. Note: HK is mostly shale gas and look at the premium they went for.

    My holdings have acreage in the Eagle Ford shale of south Texas and the Bakken in Dakota/Montana. The drillers are going after oil/condensates rather than dry gas.

  23. http://www.theaustralian.com.au/business/mining-en... The... [#89550]
    By: Les (7233 comments) Go to top ↑

    http://www.theaustralian.com.au/business/mining-en

    The Ozzie behemoth putting cash to work in a natural gas play in the US. Quite a coup for the owner of Petrohawk. As Kaimu would say, that’s some serious value being created there. From $60m to $12b.

  24. Kaimu, "How many people alive here in 1940 when Ida May... [#89554]
    By: Grym (5469 comments) Go to top ↑

    Kaimu,

    “How many people alive here in 1940 when Ida May got her first social security check knew that the Social Security Trust Fund would end up being just another “debt machine” for the politicians to buy votes and extend the power of their political monopoly?”

    Well, I was only 3 then, but I remember when I found out my uncle, who was a farmer, didn’t have to pay SS when I started my business in 1966 I remember saying how lucky he was because it was obvious it could work. Since I never thought I would be able to collect i saved as much as possible for my wife and myself. It could still well be the smartest thing I ever did.

    Somewhere along the way they got the farmers too. (Long before Congress had to pay into that black hole.)

    Grym

  25. Just got this from Stratfor via John Mauldin: "This... [#89555]
    By: Grym (5469 comments) Go to top ↑

    Just got this from Stratfor via John Mauldin:

    “This article discusses the SEC’s ongoing investigation of the “reverse mergers” where questionable Chinese auditing allowed companies to list on U.S. stock exchanges despite their fraudulent accounts.

    Ah, so. They have most favored nation status, so I guess allowing such has been just one more favor.

    JohnMauldin@2000wave.com

    Grym

  26. How do you measure it? How do you define it? Would you... [#89560]
    By: Les (7233 comments) Go to top ↑

    How do you measure it? How do you define it? Would you believe your productivity could improve if you were calmer, happier and less anxious? The look into the two following links:

    http://psychcentral.com/news/2011/07/08/short-term

    http://www.youtube.com/watch?v=150cqgYh8sQ&feature

    Note in the 2nd link the fellow student of Condaleeza Rice from college. Equally gifted at school but went down a different path. How many people have lost their productive years in such a manner?

    Believe it or not, the Taoist Trader course speaks to the subject: http://www.traderwizard.com/

    I get a little bit every week at Aikido and look forward to more intensive courses in meditation in the future.

    • Les, your third link was cut off here is a better on:... [#89561]
      By: loannetter (1298 comments) Go to top ↑

      Les, your third link was cut off here is a better on: http://www.youtube.com/watch?v=150cqgYh8sQ

      I have seen many people make such shifts inside 3-4 weeks having participated in beginner meditation classes. To observe yourself in such an experiential way, to just be present to the moment is coming home to yourself.

      • thanks susan, the previous link was Facebook embedded which... [#89563]
        By: Les (7233 comments) Go to top ↑

        thanks susan, the previous link was Facebook embedded which screwed it up.

        Yeh I begin to appreciate the benefits of a little meditation within the wider aspects of Aikido overall.

        My family has just left for Italy for a week. Going to try something radical. No caffeine, no alcohol for 7 days. Let’s see what a little chemical detox can do for myself and particularly my trading as the caffeine has long worn off when US markets open at 3:30pm in Switzerland. Need to find alternatives for mental well being as I’m making trading decisions until 10pm, which is exhausting at the end of the week.

        • Les, The principle of not 'clouding the mind' suggests not... [#89564]
          By: loannetter (1298 comments) Go to top ↑

          Les, The principle of not ‘clouding the mind’ suggests not ‘using’ all kinds of physical, chemical and mental intoxicants. Good luck!

      • ... [#89568]
        By: Grym (5469 comments) Go to top ↑
        • Grym Love the visual reminder to your computers to behave!... [#89572]
          By: loannetter (1298 comments) Go to top ↑

          Grym
          Love the visual reminder to your computers to behave! I once took an old hard drive that died abruptly and ceremoniously burned it on a pyre.

          It is said if you have a raging bull (mind) give it a larger paddock.

  27. I decided to have a crack at GOOG for a couple of reasons... [#89562]
    By: Les (7233 comments) Go to top ↑

    I decided to have a crack at GOOG for a couple of reasons, the primary being that short-term consolidation was likely before GOOG headed higher.

    In buying GOOG calls within 90 seconds of the open I was practising several things. One is practicing Livermore’s mantra – “It is what people did in the stock market that counted – not what they said they were going to do”; i.e, it’s important to test your thesis live in the market place if you want to improve understanding.

    Why would I want to sell $GOOG on such a monster move? Firstly, I know people panic in such situations. Offers dropped from about $8.80 to $.49 in the first minute. In buying them I had already seen GOOG test $600 on big vol. and respect resistance. If resistance is respected then the easiest way is down. That respects a second rule I’ve learned in the market place – DON’T CHASE THE GAP UP!

    My fault was in not being sufficiently aggressive. I hit the offer when bids where .20 lower and remained lower for several minutes. I only bought 2 because I was looking for a test of support some $25 lower, when $GOOG bounced off initial support at $590 or thereabouts. I was happy to say goodbye to $100 for a potential gain much larger, which unfortunately didn’t occur.

    What was interesting to note that I had bought $500 puts so low that the bid never undercut me, even as GOOG started climbing towards the end of the day. That’s something useful to understand. Panic can make for a 20% gain even as the stock is rising.

    2nd thing I noticed was that $500 puts lost $8.50 or thereabouts as I was closing my trade. $600 calls were worth about $12 more, so I’m guessing there was an options spread that could have been profitable, but unfortunately I’m no options trader and those that are don’t post at this blog anymore, which is also unfortunate. I’d love to learn a bit of options trading.

    So what I learned from GOOG Friday morning was a) bid aggressively, both in size and price. 50% gains were on offer in the bid price but I had only 2 puts and wasn’t interested – 10 puts would have made all the difference. As I watched the market firm up towards EOD I walked with only 20% and some useful understanding of a particular market situation.

  28. "A market holding support in the face of bad news; if the... [#89565]
    By: Les (7233 comments) Go to top ↑

    “A market holding support in the face of bad news; if the S&P closes back above 1320 the Bulls may have dodged another bullet.”

    Thanks Patrick, you remain one of my key references in daily post-close trading analysis – I thank Bill for opening up the space a little for other traders on the team to post their thoughts.

    I remain committed to $POT – it appears to be building an ascending triangle and prepping for higher prices in the daily chart.

    Added to $SLW on the Friday dip. My charts were down Thursday which happily didn’t hurt as Friday was the day I was more confident $SLW was going to make its move to $40.

    $AAPL presented a solid entry opp at the EOD Friday. I was too sluggish to get in and buy it here. I thank GW and Bill for remarking on the effectiveness of Fib retracement analysis as I sort of understood what it was about but having been using it very effectively.

    As you can see on $AAPL’s daily chart posted, the 38.2% retracement was right on the money. These beta stocks will be swung traded in future with the help of fib. I still can’t believe I only looked at precious metal stocks when Bill said a summer rally was coming up.

    Semi’s and banks suck badly but it looks like they’re about to double bounce and find support. Definitely two sectors to watch in the coming week.

    Someone definitely said market up in the final 30 minutes.

  29. ... [#89566]
    By: Les (7233 comments) Go to top ↑
  30. ... [#89569]
    By: Grym (5469 comments) Go to top ↑
  31. ... [#89570]
    By: Les (7233 comments) Go to top ↑
  32. James Puplava - Brent Cook interview minutes: Puplava... [#89571]
    By: Les (7233 comments) Go to top ↑

    James Puplava – Brent Cook interview minutes:

    Puplava questions poor major miner share price. Cook suggest previous management treatment of shareholders, dilution etc. Production costs always outstrip projections.

    Puplava suggests miners are now offering dividends to perhaps compete with ETF’s. Cook suggests miners will soon be accepted by mainstream investors as opposed to previously being specialty hedge against the dollar.

    Puplava notes Marc Faber continues to observe little allocation of gold and miners in his global audiences. Suggests plenty of upside and value in the equities relative to the bullion. Cook suggests mid-tier with solid balance and growth prospects.

    Puplava makes comparison to present industry play vis-a-vis the tech bubble of the 90′s. Biggest bucks to be found in the CSCO’s, INTC’s etc, i.e, the mid-tier with growth prospects. Cook replies that the big bucks will be made in the juniors with high-margin discoveries [This is what Bill has been saying for some time now].

    Puplava questions the lack of new good deposits with which major-tiers can buy out. Cook replies that many juniors claim deposits but very few pass due diligence. Puplava suggests improving shareholder value for the major-tiers would be found in purchasing high quality cheap assets. Cook agrees but again notes the relative dearth of quality assets available globally, given historically higher than expected production costs.

    Puplava comments on feasibility of explorers attempting to start production on their own, suggesting that selling ounces they own is better than trying to work outside their expertise i.e, create their own mine. Gives an example in Mexico. Cook agrees that most companies cannot make that transition from exploring for gold and making the mine to extract it. [that's when the 800lb gorilla walks in with a 40% premium takeover offer I assume]

    http://www.financialsense.com/financial-sense-news

    That’s half the interview. Thanks Bill & Kaimu, sounds like other investors will sooner or later catch on to what you’ve already recommended here.

  33. The software is not permitting me to upload the WIR at this... [#89576]
    By: Bill Cara (4105 comments) Go to top ↑

    The software is not permitting me to upload the WIR at this point. Matt is looking into the problem. I had the same one a week ago, but it cleared got up. This one is still a problem.

    • interesting idea Bill - a metals/bullion bank. How does... [#89577]
      By: Les (7233 comments) Go to top ↑

      interesting idea Bill – a metals/bullion bank. How does that work?

      So you suggest SLW will continue lifting in relation to the price of silver unless the interventionists do something? So are u suggesting that the debt ceiling resolution farce will be nothing more than a speed bump slowing SLW’s continued rise?

      I see once again currency moves defy chart logic and do their own thing again today. Happy to see silver testing $40 resistance. Hopefully SLW follows. We shall see.

      ——————————–

      $ strengthening as deadline approaches to raise debt ceiling by $4T in order for the United States to remain temporarily solvent. You can’t make this up.

      Uncle Buck continues to float around in this ascending triangle. Trying to remain relevant in a world rediscovering hard currency value…

      $GOLD is getting a couple of bids over $1600 this morn. Cool bananas.

      • Les, Remember my discussion of free association thinking;... [#89578]
        By: Bill Cara (4105 comments) Go to top ↑

        Les,

        Remember my discussion of free association thinking; I write the WIR as fast as I can type, using the first thoughts that come to mind. Here’s the concept that was flashing in my mind as I wrote about Silver Wheaton:

        Nose rings are used in domestic cattle, particularly bulls, to allow control and ensure safety of handlers. The ring applies pressure on the nose, one of the animal’s most sensitive areas.

        SLW is the bull in the silver barn.