Bill Cara’s Blog for Mar 16, 2012

CTA Trading Desk Morning Report

[7:00am ET] Good morning.

My granddaughter Caitlin Cara wishes everyone here a Happy St. Patrick’s Day.

blog12_mar_16.1.gif

Btw, her Dad’s best friend, the Best Man at Will & Fiona’s wedding, John Cowie, will be taking over the general managership of this website and all others I am involved in. John is an entrepreneur who has been very successful with AdlureMedia.com.

http://www.adluremedia.com/

Have a good day. I will be back for the Week In Review. Hopefully we are all in the green this weekend.


Good morning, Geoff here.

Consumer Price Index was weak giving rise to traders thinking that there is room for the Fed to continue its current inflationary policy stance. Headline was 0.4% which was inline with expectations. Core was 0.2% which was lower than the expected rise of 0.3%. Many of these government numbers have become so “adjusted” that they are practically meaningless in the real world. However, the black boxes that trade off of them do not live in the real world. Trade what you see.

Industrial Production had 0.0% change in February. Consensus was 0.5%.

Consumer Confidence will be released later today and it will be interesting to see that data.

It looks like the S&P 500 has a decent chance of closing over 1400 today. This has got to be killing the bears who thought the world was going to end. We are long, but I feel for them nonetheless.

The bankers run Washington. The bankers run Europe.

There is no difference between Democrats and Republicans – I know many of you have picked a side and don’t want to hear that, but it is true. Simply follow the money.

Lies are everywhere and people are waking up and getting angry. Maybe the bankers are feeling it. Hopefully the resignation letter of Greg Smith is just the start of a positive change as guilt takes hold. I know that there is a long list of recent banker resignations – an unprecedented number of resignations. Maybe the winds are changing.

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 2,217.38 6:44AM EDT Up 19.28 (0.88%) Components, Chart, More
^BFX BEL-20 2,355.47 6:57AM EDT Up 11.49 (0.49%) Components, Chart, More
^FCHI CAC 40 3,589.06 6:57AM EDT Up 8.85 (0.25%) Components, Chart, More
^GDAXI DAX 7,159.67 6:45AM EDT Up 15.22 (0.21%) Components, Chart, More
^AEX AEX General 336.05 6:44AM EDT Up 0.95 (0.28%) Components, Chart, More
^OSEAX OSE All Share 490.94 6:45AM EDT Up 0.90 (0.18%) Components, Chart, More
^OMXSPI Stockholm General 351.70 6:59AM EDT Up 0.75 (0.21%) Components, Chart, More
^SSMI Swiss Market 6,333.30 6:43AM EDT Up 1.08 (0.02%) Components, Chart, More
^FTSE FTSE 100 5,958.39 6:45AM EDT Up 17.67 (0.30%) Components, Chart, More
FPXAA.PR PX Index 993.00 6:57AM EDT Down 0.10 (0.01%) Chart, More
MICEXINDEXCF.ME MICEX Index 1,616.69 7:57AM EDT Down 5.54 (0.34%) Chart, More
GD.AT Athex Composite Share Price Index 751.50 6:42AM EDT Up 1.18 (0.16%) 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


Jeff Borsato’s Hidden Truth

The End of Illness

Brought to you by the good folks at the Freakonomics Blog, this interview titled The End of Illness is candid interview with author David Agus.

In his book by the same title, David answers a host of questions from folks about the perils of statin drugs, daily low-dose aspirin and the benefits of supplementation.

It’s informative and engaging, and I have the book on order. Looking forward to the read. Ultimately we are what we eat, think and say. Trading is a means, not the end: wealth, happiness and material goods are worthy goals but are only achievable if you are still around.

Have a great St. Patty’s day.

Jeff Borsato
jeffborsato@caratrading.com


  1. 8:30 AM ET Consumer Price Index 9:15 AM ET Industrial... [#106407]
    By: davefairtex (5215 comments) Go to top ↑
    • 8:30 AM ET Consumer Price Index
    • 9:15 AM ET Industrial Production
    • 9:55 AM ET Consumer Sentiment
  2. 2 in Buy alert 11 in Distribution Zone 6 in Sell... [#106408]
    By: davefairtex (5215 comments) Go to top ↑
    • 2 in Buy alert
    • 11 in Distribution Zone
    • 6 in Sell alert

    Accumulation Zone: Monthly 4, Weekly 1, Daily 6
    Distribution Zone: Monthly 19, Weekly 30, Daily 28

  3. (March 15 Press Release) FCX is revising its consolidated... [#106409]
    By: Mark H (1363 comments) Go to top ↑

    (March 15 Press Release)

    FCX is revising its consolidated first quarter sales volumes to 795 million pounds of copper and 300,000 ounces of gold to reflect the production disruptions at Grasberg. Sales were expected to be 875 million pounds of copper and 425,000 ounces of gold.

    Previous quarter sales were 823 million pounds of copper and 133 thousand ounces of gold.

    • Mark H, I've been hearing how low volume has been in... [#106410]
      By: Grym (5469 comments) Go to top ↑

      Mark H,

      I’ve been hearing how low volume has been in equities and someone posed the question where all the money was going a couple of days ago.

      I did a not very scientific check late yesterday and picked several random dates between late 2008 and late 2009 to compare with yesterday’s volume.

      What I found was as follows:

      (2008, 2009)
      Dow average daily volume 1926.25 m shares
      Nasdaq daily volume 1129.75 m shares

      (3-15-12)
      Dow volume 843.07 m shares
      Nasdaq volume 451.64 m shares

      Today roughly 40% of volume back then.

      http://www.schaeffersresearch.com/commentary/

      So is this a case of the flesh is willing, but the spirits are weak?

      Grym

      • It looks more like animal spirits have been broken. Most... [#106411]
        By: 4ever (612 comments) Go to top ↑

        It looks more like animal spirits have been broken. Most people fled the market three years ago vowing to never return. A few have begun to change their minds, but competing with rooms full of algo-driven computers & HFT, it still seems the deck is stacked against the little guy.

        • I believe we've witnessed a massive short squeeze which... [#106412]
          By: Mark H (1363 comments) Go to top ↑

          I believe we’ve witnessed a massive short squeeze which took FCX to $49.

          As always, position is everything. Caveat emptor.

        • ..."competing with rooms full of algo-driven computers... [#106413]
          By: Vadym Graifer (4341 comments) Go to top ↑

          …”competing with rooms full of algo-driven computers & HFT”…

          HFT’s domain is milliseconds and fractions of a cent. What does anyone trading in other time frame and for more that fraction of a cent care about them?

          Algos are equally irrelevant. Being programmed to work in a certain way under certain market conditions, they simply become one of market participants – that same program could have been executed manually but certain players elected to program the action and leave a live trader to oversee it, turn it on and off as conditions dictate.

          Even day traders whose time frame and target sizes are the closest to HFT/algos adjust and trade profitably just fine; those who trade in bigger time frames can do that never even hearing about those.

  4. ... [#106414]
    By: Bull Hunter (3552 comments) Go to top ↑
  5. I'm selling a few things, like YHOO, just bought some May... [#106415]
    By: ea32da32 (2362 comments) Go to top ↑

    I’m selling a few things, like YHOO, just bought some May VIX calls – anyone looking to get swing trade long on TLT?

  6. Hi Bill - they grow up too fast! Please tell Caitlin thank... [#106416]
    By: ea32da32 (2362 comments) Go to top ↑

    Hi Bill – they grow up too fast! Please tell Caitlin thank you and a Happy St. Patrick’s Day to her, you and your family;-)
    Earl

    • happy St.Patrick's Day Caitlin! and to bill, geoff, hunter... [#106421]
      By: skyler (67 comments) Go to top ↑

      happy St.Patrick’s Day Caitlin! and to bill, geoff, hunter, vad and all the contributors as well.

    • Caitlin has her right hand on the bible and her left hand... [#106456]
      By: Ilya (572 comments) Go to top ↑

      Caitlin has her right hand on the bible and her left hand is obviously behind her back with her fingers crossed.

      The caption should read “I did NOT give the dog that ex-lax pill!”

      The ignorant bliss of childhood should culminate on that day that she sees a butterfly emerge from its cocoon and wonder…how.

    • Nothing quite like our grandchildren, Bill. Beautiful! And... [#106461]
      By: tradylady (205 comments) Go to top ↑

      Nothing quite like our grandchildren, Bill. Beautiful! And they do grow up too fast.

  7. BRCM - estimates increased at JMP through 2013, JMP... [#106417]
    By: Bull Hunter (3552 comments) Go to top ↑

    BRCM – estimates increased at JMP through 2013, JMP Securities said. Company appears to have gained market share in the iPhone. Market Outperform rating and $42 price target.

    ——

    also:

    S&P 500 (SPX) target upped at Credit Suisse. SPX now seen reaching 1,470, Credit Suisse said. Stocks appear more attractive than bonds at current levels.

    • Bill talked yesterday of looking to a stronger Rupee to... [#106423]
      By: Juniorgoldminerseeker (228 comments) Go to top ↑

      Bill talked yesterday of looking to a stronger Rupee to support Indian physical gold buying.

      I have read of India suffering balance of payment deficits which have been weakening the currency.
      Gold imports into India, as the largest global importer, still just ahead of China, are some significant part of the trade deficit and the Indian government acts to reduce gold imports and to strengthen the Rupee, as a weak currency is driving too much inflation in India.

      So rather than government encouragement of gold accumulation as in China there may be some official disincentives coming from India.

      However in a culture with an affinity for gold I suspect that while there is Indian inflation, driven by Western printing as much as anything India can control, physical gold buying will be strong.
      A stronger Rupee counteracts the import duty?
      Net net government takes extra tax. Sounds about right.

      Short term a possible rush for physical before the tax.
      Longer term….drop off then normalisation?

      • I just view it as another tax. This time it is on the... [#106425]
        By: Mark H (1363 comments) Go to top ↑

        I just view it as another tax. This time it is on the wealthy. I don’t think it is significant. If the economy falters, that will be a problem.

        Price of gold will rise or fall until equilibrium is re-established.

        • A "majority" of the gold traded in India is "off the... [#106441]
          By: jragusa (121 comments) Go to top ↑

          A “majority” of the gold traded in India is “off the books”. The tax rise will do zilch to curtail this “tax free” market. Also, often times when you employ tactics to dissuade individuals from procuring certain items (by raising taxes or banning purchases, for example), it tends to have the opposite effect.

          Indeed, if the Rupee keeps falling and stocks stagnate, Indians may seek the safety of gold anyhow.

          The Rupee is falling because of higher trade deficits. However, I read an article somewhere (sorry lost the link) indicating that about 1/3 of the trade deficit is because of gold imports and another 1/3 is oil imports. So ironically, a rising Rupee would render these commodities cheaper and alleviate the deficit problem.

          On the economic front, if one overlooks the political corruption scandals, India boasts a [relatively] healthy economy and low government debt and future commitments. The banks are well capitalized and regulated and, in light of the corporate take over of the US politicians, India may have a more capitalistic system than the US. All good reasons for a stable currency.

  8. "For the great Gaels of Ireland Are the men that God made... [#106419]
    By: Ilya (572 comments) Go to top ↑

    “For the great Gaels of Ireland
    Are the men that God made mad,
    For all their wars are merry,
    And all their songs are sad.”

  9. CVI is selling units of CVR limited ( company : UAN ) to... [#106420]
    By: baz22 (2875 comments) Go to top ↑

    CVI is selling units of CVR limited ( company : UAN ) to deal with Icahn pressure. UAN is a major nitrogen/ammonmia producer in midwest. Diret CF competitor. UAN was a spin-off from CVI last year, that has direct access from CVI coke for processing and excellent rail transportation. Watch this one. ** reference CF chart from 2009

  10. I'd call this a credible source. If these are the facts it... [#106424]
    By: westcoaster (1130 comments) Go to top ↑

    I’d call this a credible source. If these are the facts it makes Lehman’s excesses look mickey mouse. We’re riding a runaway train.
    http://www.straight.com/article-632871/vancouver/g

  11. Kudlow seldom gets it right, but bless his heart for... [#106426]
    By: Bill Cara (4105 comments) Go to top ↑

    Kudlow seldom gets it right, but bless his heart for continually supporting the USA.

    Now if he could only persuade DC and the States to tax more and spend less, so that balanced budgets prevail, we might not be so interested in Gold or other low-risk investments.

  12. will come back into focus... the reason I lean toward... [#106427]
    By: baz22 (2875 comments) Go to top ↑

    will come back into focus… the reason I lean toward nitrogen producers are the fact that nitrogen leaches from the soils and potash does not do so nearly as much.. None of the big guys that farm in NC ( my home state ) are cutting back on production… every available piece of land is being utilized, and there is not enough available for planting. Talked with one yesterday that said a lot of the farmers don’t plant cotton as they do not have the proper equipement to deal with the process. Reason for high cotton prices ?? I don’t really know that, but it could only bode well for Deere, as the demand increases for the raw material.

    • Check out POT chart. I got lucky a couple of days ago when... [#106434]
      By: westcoaster (1130 comments) Go to top ↑

      Check out POT chart. I got lucky a couple of days ago when I decided to go back in.

      • Hi West... yes, got interested a couple days ago at $... [#106435]
        By: baz22 (2875 comments) Go to top ↑

        Hi West… yes, got interested a couple days ago at $ 42.80′s, as heavy buying on bids was printing…

  13. Rim Q4 results are said to be released on March 29, but... [#106429]
    By: SyncMaster152T (166 comments) Go to top ↑

    Rim Q4 results are said to be released on March 29, but with no warning! During Q3, Rim prepared investors for poor results, however, investors are absent caution this time around. Stock up 5%.

  14. I think Grpn is going to be dust sooner than later. here... [#106430]
    By: NYUGrad (4750 comments) Go to top ↑

    I think Grpn is going to be dust sooner than later.

    here are just some of the competitors:

    1. http://local.amazon.com (NEW)
    2. livingsocial.com (big investment by amazon)
    3. Google offers (launched is after Groupon declined the buyout offer)
    4. Yelp also has their own local offers

    of all the above, i think AMZN has the muscle, cash, and inventory, to really win that offer war. And they have two horses in the race.

    • Add endless chain of local outfits doing the same. I am... [#106433]
      By: Vadym Graifer (4341 comments) Go to top ↑

      Add endless chain of local outfits doing the same. I am constantly bombarded by e-mails from dealfind, islanddailydeals, victoraifinedeals and a few others. Same idea, works exactly the same, and this business model has no customer loyalty – buyers will go where the best deal is

      • The other day I received an email from AmazonLocal offering... [#106439]
        By: BillySundance (1355 comments) Go to top ↑

        The other day I received an email from AmazonLocal offering a coupon for a shoe/sandal website. Normally I wouldn’t find this strange except that I had visited the shoe/sandal website a week before and looked around but not bought anything. So, I am led to believe that AmazonLocal was able to determine that I had visited but not purchased the item and that I would be a prime candidate to purchase the coupon, which I did.

        I think that the future of this industry is in the data/analytics needed to figure out who to target for the deals/coupons. GroupOn’s model, to my knowledge, makes each offer available to all consumers. A business owner doesn’t want to send these incentive offers to its core base, only potential new customers. I read another blurb somewhere about a company Constant Contact (ticker CTCT) which is starting a deals service with much more detailed analytics to provide its customers as well.

        If these companies survive it will be based on becoming an actual marketing platform rather than a coupon distributor. They will need to help the clients effectively target consumers and increase long-term sales. From what I can gather, it looks to me like Groupon lacks the technological assets to be considered any sort of leader in this industry. I know they have been making acquisitions but I doubt they can compete in analytics space with the like of Amazon.

        • As many point out a business suited to the e-revolution we... [#106440]
          By: Juniorgoldminerseeker (228 comments) Go to top ↑

          As many point out a business suited to the e-revolution we were promised in the tech bubble, now being delivered but without a good “moat” to really add value for a dominant player.

          Another e-business in the UK news today, after a speech by Andy Haldane from the Bank of England is peer to peer lending.
          Bringing together borrowers wanting a lower rate and savers wanting better returns than near zero cash without the risks of the markets or peak government bonds. Risk levels are selected and matched to returns.

          Seems in the UK some are establishing good reputations, and this is a business which may well build barriers from trust and reputation, quoting low default rates and screening. Also a business that could have some horror stories from bad operators.

          Interestingly I think there is also business funding emerging from these channels.

          Quite the non-interventionist, non HB&B model we might like to emerge for a new wave?

          Any views on emerging winners?

        • Good mention of CTCT. great company that is not a fly by... [#106443]
          By: NYUGrad (4750 comments) Go to top ↑

          Good mention of CTCT. great company that is not a fly by night operation. in my sales career i worked for a company that competed with them on a certain level back in 2005.

          Also have used their service on several levels and their staff seemed very knowledgeable.

          that SaveLocal idea by CTCT is a good one. they already have the small business client already using their email marketing service. SaveLocal is a very natural upsell, especially when the offerings of groupon and livingsocial are not profitable for the business owner.

          FD: No position in CTCT.

        • BillySundance, I am not pleased with Groupon. They should... [#106444]
          By: Bill Cara (4105 comments) Go to top ↑

          BillySundance,

          I am not pleased with Groupon. They should not be allowed to sell products that don’t exist. In my case, my wife ordered an electronic product said to be Chinese-made. Many weeks and several queries to Groupon later, the product was finally shipped. The user manual was in English, but indecipherable. We have never been able to use it. Groupon could care less. What I think happened was that the product was a knock-off of a known product made by a Chinese factory. An American entrepreneur (I’m guessing) worked a purchase order that went into effect after a certain number of orders were received by Groupon. The factory then banged out the product and the user manual and shipped to a warehouse in the US where it was then re-shipped to customers. This was no-lose for the entrepreneur, the factory and Groupon. We got screwed.

          To be fair, a few other products and services my wife bought from Groupon worked out without complaint. Still, I am unhappy to get the brush-off from Groupon in this particular matter.

          • Bill, On one hand, I am actually surprised that GroupOn... [#106445]
            By: BillySundance (1355 comments) Go to top ↑

            Bill,

            On one hand, I am actually surprised that GroupOn hasn’t offered you a return/refund/credit on this defective product. I have had friends who returned coupons for full refund (as simple as calling and saying “hurt my knee and can’t use this golf lesson certificate!”).

            On the other hand, it sounds like GroupOn is getting away from the core small business coupon/certificate business and into the field of individual product marketing offers like the one you describe. My guess is that unlike the coupon offerings where they may be able to pass the losses/costs of refund on to their small business partners, this was not the case with the offer you are referring to.

            In a way, they are trying to be like Amazon with simple product offerings except that on Amazon there is a system to determine trustworthiness of the seller and all the terms of refunds/returns (it may not be perfect but at least there is some establish reputational system). Doing business this way, GroupOn is really only as trustworthy as the outfits it chooses to partner with. In this case, it sounds like their standards for partnering on an offer like this are perhaps not up to snuff.

            I’d continue to be very skeptical of their product offerings as they seem to be deflecting fulfillment responsibility to their partners. I would also be skeptical of booking travel offerings thru an outfit like this.

          • Just a tidbit. GRPN insider selling lockout from ipo ends... [#106446]
            By: NYUGrad (4750 comments) Go to top ↑

            Just a tidbit. GRPN insider selling lockout from ipo ends May 2nd i believe.

            could see some pressure leading up to this.

  15. I no longer listen to terrestrial radio. I us Pandora a lot... [#106431]
    By: NYUGrad (4750 comments) Go to top ↑

    I no longer listen to terrestrial radio. I us Pandora a lot if i am not listening to music i already own. the main reason is i connect my iphone via bluetooth and stream pandora radio to my car speakers. however i pay nothing.

    And i just tried iheartradio’s iphone app which is a very similar service and also free.

    if Pandora vanished tomorrow, i would be ok. there are now plenty of music streaming apps for the iphone and android market that also can be bluetooth connected to a car radio.

    Thus i do not know how long Pandora can survive its own market cap and lofty growth expectations.

  16. http://tcrn.ch/zLZC1H On a cloudy and wet day here in NYC... [#106432]
    By: NYUGrad (4750 comments) Go to top ↑

    http://tcrn.ch/zLZC1H

    On a cloudy and wet day here in NYC, the bright spot are Apple stores i guess.

    RIP Steve Jobs

  17. ... [#106436]
    By: Grym (5469 comments) Go to top ↑
  18. APPL looks like its beginning to rollover. If so the... [#106437]
    By: lessmore (322 comments) Go to top ↑

    APPL looks like its beginning to rollover. If so the selling waited for the release of the new ipad.

  19. the spreads on UAN mimic TNH from a couple of years ago... [#106438]
    By: baz22 (2875 comments) Go to top ↑

    the spreads on UAN mimic TNH from a couple of years ago… lot of shaking of the tree till a base is put in ( also reminds me of the DG time frame bids several months after their ipo. )..

  20. ... [#106442]
    By: Bill Cara (4105 comments) Go to top ↑

    http://www.rollingstone.com/politics/blogs/taibblo

    Unlike the recent Goldman Sachs matter where I took the side of GS, this one looks bad for JPM.

    Whistleblowers must be protected.

    The GS vice president, on the other hand, took an under-handed libelous shot at his employer before they even knew he was disgruntled and had quit. That situation should not be allowed to set a precedent for acceptable practice between employer and employee.

    • Bill - "The GS vice president, on the other hand, took an... [#106457]
      By: davefairtex (5215 comments) Go to top ↑

      Bill – “The GS vice president, on the other hand, took an under-handed libelous shot at his employer…”

      Its only libelous if its not true. Truth, after all, is the ultimate defense against charges of libel. I’m sure Goldman is not so eager to submit to pretrial discovery of relevant corporate email boxes.

      Think that GS VP might have saved emails where customers were called muppets – and other names as well? I’m guessing he did. I would have, if I were going to write such an op-ed piece, in order to insulate me from…charges of libel.

      • davefairtex, I draw the line between culture and probable... [#106462]
        By: Bill Cara (4105 comments) Go to top ↑

        davefairtex,

        I draw the line between culture and probable fraud or other illegal behavior of any company. Whistleblowers of the latter need to be protected by government because it is the law that may have been broken and to discover the facts the investigators need proper access to the records. I totally support govt protection of the whistleblower. However, in the case of employer practices that an employee finds personally unacceptable, there are or should be two solutions: (i) the employee resigns and honors the prior employment contract, or (ii) the employee makes a complaint to the company. If the complainant fears that the internal disclosure would likely end in termination, he/she ought to be able to complain to an independent director who is authorized as the internal ombudsman. That director would then have the obligation to make the case (but not the complainant’s ID) to all independent directors, and if there is a consensus agreement, that group should bring the matter forth to the executive directors and CEO.

        I find Mr Smith’s actions intolerable. Whether it’s Goldman Sachs or McDonald’s, there is a right way and a wrong way to move these issues forward. Mr Smith, in my view, took the wrong path.

        In my career in financial services, I have run up several times against problems that I had to decide which path to take. In one situation, I moved up the seniority ladder from #38 to #11 inside ~18 months because I could see the general discontent with the practices of our divisional president. People were quitting. Although I was never directly affected in my work, it bothered me to the extent that when offered a job in another firm, I decided to take it. During the exit interview with two senior officers/directors of the company I explained that the company had what I believed were certain problems with the divisional president. At the end of the interview, I left the building, my head held high. In a different company, the Exec VP knew the Chairman and CEO didn’t like his cigar smoking in the executive offices, so he would come down to mine and shut the door behind him. This was a time when smoking in offices was permitted. After several days of choking and trying to figure out what to do about it, I simply said that I wasn’t a smoker and my work was being affected by his smoking in my office. We had a laugh, and he never brought a cigar with him again whenever he would drop by. Clearly, if an employee wants to cause a stir, they can do it. But if they don’t respect the actions of an employer they have an obligation to respond in the proper way. Setting up a public bombshell, backed by some evidence, or not, is not the proper way.

        This issue is an important one. We all have opinions on it. Some of us have worked or still work in financial services and probably have more informed opinions. Based on numerous letters I receive from persons who are still employed by financial services companies, a couple of which I reviewed here anonymously, there is general dissatisfaction on many levels, but also a fear of the network of top management that control the industry.

        The industry leaders I refer to as Humungous Bank & Broker (HB&B) have the power to sustain bad practices and, unfortunately, as I see it, there has been a break-down and I started writing about it eight years ago in these pages.

        Ultimately, the customers, employees, and legislators can bring about desirable changes, and my point is that, while it may not be an optimal situation at present, there is a right way and a wrong way to go about doing it. For sure the optimal change methodology, and the result we would hope for, is not going to happen overnight.

        I welcome everybody’s views on this. Together we will get a better handle on it than any one of us has at present.

        • ... [#106463]
          By: Grym (5469 comments) Go to top ↑
        • Bill & DaveFair, I am thankful for Mr.Smith's rant... [#106467]
          By: Illini (672 comments) Go to top ↑

          Bill & DaveFair,

          I am thankful for Mr.Smith’s rant, just as I am for most of Kaimu’s. Enough said, for now. These are developing stories. I hope they will not be forgotten or dismissed from MSM.

        • Bill - Its an interesting distinction you make between a... [#106469]
          By: davefairtex (5215 comments) Go to top ↑

          Bill -

          Its an interesting distinction you make between a whistleblower (who complains about illegal activities) and Mr Smith, who complained publicly about legal activity that happens to also be immoral. The distinction makes sense, and I do agree that a whistleblower deserves protection and support. Whistleblower – what a tough role to take on. Its a lonely path to go against the herd in this way.

          Right now, it appears that HB&B routinely breaks laws – worst case paying only a small fraction of their illegal gains as fines – AND they have a pretty tragic moral culture as well. What makes it worse is, HB&B has managed to get the laws changed so that what should be illegal behavior is actually legal.

          I would be totally behind your differentiation of illegal vs. “bad culture” if only HB&B weren’t all about writing the laws to their benefit so consistently. The fact that they only have a “suitability” requirement for care of their customer’s life savings seems wrong to me. That they can legally institutionalize ripping off their clients I find offensive, and I applaud efforts to keep this sort of behavior in the public eye.

          Ideally, these (financially) immoral acts should be made illegal. At that point, then Mr Smith’s actions would be that of a whistleblower. The fact that GS’s institutionalized robbery is not illegal is simply a product of successful lobbying.

          When faced with Mr Smith’s situation, people choose to handle it in different ways. Some leave quietly for other industries. Some strike out on their own, trying to make things a better place by example. Some decide to start throwing bombs after they see too much. Some stay on the inside and try to work for change – or possibly get co-opted and corrupted themselves. And some simply go along with it all, collect their bonuses each year, and say to themselves that if it wasn’t them doing it, it would be someone else, so somehow that makes it all ok.

          What is “the right way?” I think you might have to walk a mile in the other man’s shoes to know for certain. Or perhaps a mile isn’t enough – maybe you would need a few lifetimes.

          Here is an example. My Mom can personally attest to the impact of muppetizing customers and ripping out their eyeballs. Her “advisor” at Citibank thought auction rate securities were a “suitable” investment for 50% of her portfolio – a few months prior to the ARS market seizing up. Citi got out of their massive ARS holdings and pawned them off on their collection of retired widowed schoolteacher clients. Only the intervention of the NY AG (bless him) got that money back for Mom. Can you imagine how this affects my attitude towards the subject?

          I feel that sort of behavior should be not only illegal, but structurally impossible. Advisors should not have inventories of high-margin crap to dump. The temptation to screw their widowed, retired schoolteacher customers is just too high. And so people like Mr Smith who continue to keep this in the public eye are doing a public service, I feel.

          However if issues of structure remain unaddressed, likely nothing will change. And that’s Vad’s point, and one you have made many times too.

          As you say, these are important issues. Its great we have a place to discuss these matters that is so civilized. That is a rare thing to have these days. Thanks Bill!

          • Couldn't agree more with your entire statement. I can't... [#106472]
            By: Grym (5469 comments) Go to top ↑

            Couldn’t agree more with your entire statement.

            I can’t help seeing a parallel with the way the Nazis changed the laws to suit their goals introducing the phrase, “I was only following orders,” from those who had been “following the law”.

          • ALOHA!! One of the things I think many of us here need to... [#106474]
            By: kaimu (3289 comments) Go to top ↑

            ALOHA!!

            One of the things I think many of us here need to understand is that GS is not XOM. It is not MUX. It is not GE. It is not AAPL. It is not any of the thousands of companies globally that produce a product that will improve our lives on a daily basis. I do not need CDO or MBS to get to work or to eat. GS produces no truly mass consumable assets. Most of GS production is “liability” based. They take OPM and create risk and liabilities for OPM and sell them as a means to wealth preservation while enriching GS and its employees. Here is the other side of the GS operations … US FED member bank.

            What sets GS apart is its US FED member bank status, which is a good reason why it is that GS and the rest of HB&B have not capitulated and gone BK like the other 524 US regional banks have since 2007. As a member bank of the US FED it has access to influence and benefits few other banks or “asset producing” corporations do. GS and its top ranked representatives get to attend FOMC meetings and speak directly with any of the many US FED commissions and staff and other monetary and consumer research groups. Never mind the direct monetary privileges like the discount window and TARP. Many times certain political figures have attempted to make the US FED and its member banks more transparent. So far none of that has materialized other than lip service from the US FED and its member banks. To top it off it seems that GS has a contribution based $$ “exclusivity clause” when it comes to government appointments both here in the USA and abroad.

            A case in point as to what we are dealing with and the unique position of influence that GS has is to go to my post #106406 from a few days (Thursday) ago and read about how GS worked the Archipelago deal back in 2005. Its what makes GS-GS!

            Dave posted-Her “advisor” at Citibank thought auction rate securities were a “suitable” investment for 50% of her portfolio – a few months prior to the ARS market seizing up.

            Your Mother is one thing and then what about teacher’s pension funds. It seems that HB&B has used pension funds as a dumping grounds for all sorts of crap from GM bonds to MBS.

            What is suitability?

            The sale of unsuitable investments is actionable under Rule 10(b) of the Securities and Exchange Act of 1934, SEC Rule 10b-5. This body of law is premised, in part, on the New York Stock Exchange Rule 405- “Know Your Customer” rule, which in substantial part provides that: “Every member organization is required to:

            (1) Use due diligence to learn the essential facts relevant to every customer, every order, every cash or margin account accepted or carried by such organization.”

            FINRA has similar rules. FINRA Conduct Rule IM-2310, states that: “In recommending to a customer the purchase, sale or exchange of any security, a member shall have reasonable grounds for believing that the recommendation is suitable for such customer upon the basis of the facts, if any, disclosed by such customer as to his other security holdings and as to his financial situation and needs.”

            How can GS or any of the other HB&B really apply “suitability” to a pension fund for teachers? You really have to laugh about the part where the SEC calls it “actionable” under Rule10b. That’s the part where a $1BIL MBS scam is settled for a $100MIL fine under no admission of guilt.

            MISH Says:
            “Using “suitability clauses” on clients offers HB&B the freedom to never have to own up to any legal fiduciary responsibility.”

            WALL STREET PIMPS AND WHORES
            LINK: http://globaleconomicanalysis.blogspot.com/2012/03

            We live in a country where we get drilled into our brains from toddler stage that all us Americans are “equal”. Nothing could be further from the truth in reality and this struggle by such groups as the ACLU to make that a reality is an unending pipe dream. The US CONSTITUTION never said we were all “equal” it only offered a promise that we were all “equal” in the eyes of the “law” as to our Rights. All debatable … Nowhere is inequality more blatant, even under “law”, than where HB&B is concerned. All of the major US banks now in existence have all broken the law routinely and been favored and even “bailed out” for doing so. Some have even been “immune” from prosecution. It is the US banks that have been the source of much of the worlds derivatives woes that now plague the balance sheets of foreign governments and foreign banks. Innocent victims or willing accomplices? I tend to believe “innocence” has nothing to do with it. GS has been in trouble since before the 1929 crash.

            There exists a “culture” of privileged corruption that needs to be reversed. Nobody calls it what it really is which is a “monetary monopoly” centralized at the US FED. The major oil companies were deemed a cartel and monopoly and were prosecuted under US anti-trust laws back in the early 1900s. What else is a “central bank” and its members? Obviously laws on the books have not been a deterrent to these US FED member banks because we keep having bank and market crises even with Glass Stegal. Maybe we should start to address the “pink elephant” in the room and dissolve the giant money monopoly that exists only at the behest of the other giant political monopoly, the US Congress. All I can say is I hope that Ben and Tim don’t read this and cut me off from SWIFT …

          • ... [#106477]
            By: ea32da32 (2362 comments) Go to top ↑
  21. big volume in the last five minutes of the day plus... [#106447]
    By: tradish (27 comments) Go to top ↑

    big volume in the last five minutes of the day plus 3,233,758 shares on the bell at 4.03

  22. For those with an interest, Viterra has opened their books... [#106448]
    By: Ilya (572 comments) Go to top ↑

    For those with an interest, Viterra has opened their books to Glencore, BG and ADM. The stock in now trading a smidgen over $16 which to my mind is close to fair value. Barring a bidding war, the take out may result in a price only 5% or so higher.

    Either way, I fondly wave farewell.

    • I remember this being your 2011 pick. Nice work and bye bye... [#106452]
      By: westcoaster (1130 comments) Go to top ↑

      I remember this being your 2011 pick. Nice work and bye bye to a Canadian icon.

  23. further blocks MUX post close 706,600 at 4.02... [#106449]
    By: tradish (27 comments) Go to top ↑

    further blocks MUX post close 706,600 at 4.02 (13:06:10)
    and 1,012,400 at 4.04 (13:23:41)

  24. ... but with my new gluten-free diet I will not be drinking... [#106453]
    By: Bill Cara (4105 comments) Go to top ↑

    … but with my new gluten-free diet I will not be drinking my favorite beer — unless somebody has a solution. LOL

  25. Long Term, MUX will be a big big winner, short term is... [#106454]
    By: tradish (27 comments) Go to top ↑

    Long Term, MUX will be a big big winner, short term is anybody’s guess.

    Near the end of 2008, Bill called gold to be the trade of the generation. A generation lasts 30 years or more. We are only 4 years into it. There are no indications that governments intend to quit printing paper money anytime soon. Do the math now, it will eventually work out in the long run.

  26. ... [#106455]
    By: Clark17 (9 comments) Go to top ↑
    • First , if true a very interesting . I must ask does anyone... [#106459]
      By: BOB 47 (361 comments) Go to top ↑

      First , if true a very interesting . I must ask does anyone know what COT refers to , found in ” If you read the COT with
      intent you will find that commercials (even though we have no business being in the commercial sector , which should be reserved for companies that truly produce the metal )

      Thank you in advance , Bob .

  27. I am a Andrews pitchfork trader... MUX has been respecting... [#106458]
    By: basketguy (90 comments) Go to top ↑

    I am a Andrews pitchfork trader…

    MUX has been respecting my forks almost too good…

    Here is what I have and my reason for buying on Friday…..We can move lower for sure, but I like my odds here….

    If MUX heads lower here…A move to the 2.00 is a possibility, But I like the Risk reward here…

  28. does anyone has any thought on RMX's action on Friday? In... [#106468]
    By: 14them34me (295 comments) Go to top ↑

    does anyone has any thought on RMX’s action on Friday? In the last 15 minutes of trading, 5.2 million shares that took the stock from $3.39 down to $3.22 on the close. This is a take down similar to the Gold take down on Feb 29 in my mind. Buyer beware !!

    • There were others that spiked higher at the end of the day... [#106478]
      By: lowpickr (153 comments) Go to top ↑

      There were others that spiked higher at the end of the day. Claude Resources hit what looked like a year low at 1.03 in the last hour, ended the regular session in the 1.teens then had a bunch of crosses after hours at 1.25.

    • As some will know I have been writing here seeing value in... [#106470]
      By: Juniorgoldminerseeker (228 comments) Go to top ↑

      As some will know I have been writing here seeing value in the gold stocks. Not an unusual view, many are highlighting the historically low values of gold miners relative to the metal and the juniors against the seniors.

      Bill’s weekly review, under the gold sections, regularly opines that the next phase will be led by the juniors and be driven by a wave of mergers and acquisitions. Wisely he makes no promises as to when this might begin.
      Other industry figures like Rick Rule at Sprott/Global Resources may be talking their book but saw December as a cheap bottoming area to buy and identify great discounts against NPV.

      So when we see high volume moves lower in MUX / RMX there is a seller and a buyer. Last week saw dangerous “technicals” emerge in the miners as the Hui index made a lower low and saw several daily and a weekly close below 480 which some see as critical support. As so many in the market trade to technical signals this is surely a dangerous development and some of those late trades may have been looking to exit early.

      Certainly I sit very uncomfortably considering what next week will bring.
      Stating the obvious a stronger gold price would seem to give the opportunity for a quick spike “false breakdown” in the miners which could drive upwards to a new phase. But the weight of technical trades seeing the break could mount fierce selling pressure. What might “triple witching” have done last week?

      I have taken some comfort from divergences on the Canadian Venture exchange where we have seen higher lows since October in price, RSI and MACD. I think sometimes though this is a small cap index it can be very sensitive to the market and if I had listened better would have taken me out earlier in 2011. As at now looking better short term. However I see that Tischendorf has marked a longer term head and shoulders.

      Traders Les and Vad trading here sound strong caution around gold and the miners. It would be very interesting to see Bill’s latest views this week.
      As a retail investor I think my instincts will be to buy and sell at the wrong times and at the moment I am feeling I should run. Equally a retail investor starting an optimistic blog on miners might be quite the contrary indicator, I do hope that isn’t me.

      For the bullish view read the Rambus article attached. This might indicate a fake down.

      If this reads as pretty confused, then I for one am. I see great fundamentals for gold and the miners. Low short term rates against a now steepening long term rate curve indicates inflationary pressure? “Control” of rising long term rates can only come from QE in a world of lower Chinese surplus dollar/bond buying and Japan in a similar position the FED through QE is the marginal buyer of large US deficit treasury issuance? So there is some major fundamental I’m missing, or this is just markets doing what they do, a bull bucking off all but the strong hands, or are we who favour the miners “trapped bulls” hoping for the market to bounce back and easy pickings on any collapse. Certainly feeling confused here.

      I attach some Yahoo charts because I can save the view, I haven’t found how to do this on stock charts..?

      HUI below 480 – nervous that the pattern could be H&S like 2008 which appeared to sit at support. But we have sat there much longer this time…?
      http://uk.finance.yahoo.com/echarts?s=%5EHUI#symbo

      GDX sat at a new low
      http://uk.finance.yahoo.com/echarts?s=GDX#symbol=G

      XGD at new low
      http://uk.finance.yahoo.com/echarts?s=XGD.TO#symbo

      CDNX – view on stockcharts

      Tischendorf’s view painting a head and shoulders on the canadian venture $cdnx
      http://stockcharts.com/public/1109839/tenpp

      Rambus – as bullish as ever
      http://www.gold-eagle.com/editorials_12/rambus0305

  29. Interesting thoughts. Free markets, property rights... [#106471]
    By: 123 (78 comments) Go to top ↑

    Interesting thoughts. Free markets, property rights. Freedom…..

    http://www.nytimes.com/2012/03/18/magazine/why-cou

    Ken.

  30. James Grant Says Bond Market Is "Bubble of Modern Banking... [#106473]
    By: Grym (5469 comments) Go to top ↑

    James Grant Says Bond Market Is “Bubble of Modern Banking, a Desert of Value; Gold a Reciprocal Faith in Bernanke”; Time for an “Office of Unintended Consequences?”

    James Grant, publisher of Grant’s Interest Rate Observer, talks about Federal Reserve monetary policy, the bond market and investment strategy. Grant, speaking with Deirdre Bolton on Bloomberg Television’s “Money Moves,” also discusses the Chinese economy. ?

    http://globaleconomicanalysis.blogspot.com

    (11 minutes)

  31. ... [#106476]
    By: kaimu (3289 comments) Go to top ↑
  32. Rights? what rights? Privacy? What Privacy? Cannot believe... [#106475]
    By: tradylady (205 comments) Go to top ↑

    Rights? what rights? Privacy? What Privacy? Cannot believe the media is silent on all this stuff:

    Peacetime martial law? O has set himself up to come in and take anything he wants, anytime he wants.
    http://www.whitehouse.gov/the-press-office/2012/03

    And as of September 2013, no more privacy of any kind (including this note) http://www.wired.com/threatlevel/2012/03/ff_nsadat

    • I VIEWED the dictatorial Executive order of Friday 16 'th... [#106479]
      By: BOB 47 (361 comments) Go to top ↑

      I VIEWED the dictatorial Executive order of Friday 16 ‘th of Mar 2012 , it makes Nixon look so weak and timid . http://www.whitehouse.gov/the-press-office/2012/03… I hope our GREAT LEADER will find time to list what rights ” WE THE PEOPLE ” have left . Congress as I recall has thirty days to declare this invalid . Bob .

      • Hi Bob; the twittersphere has been on fire with this, John... [#106480]
        By: ea32da32 (2362 comments) Go to top ↑

        Hi Bob; the twittersphere has been on fire with this, John Boehner the SOB is AOL, along with his coterie of minions, the Tea Party is working to root out. It can’t come fast enough. We The People… you know he signed a bill against free speach too – if I can find that link… Barbara Jordan once said “My faith in the constitution is whole, complete, total.” http://www.youtube.com/watch?v=CDcYiyF5eLc&feature

        There is no one like her left to guide this country:-(

        Earl

  33. ... is up. Hope you like... [#106481]
    By: Bill Cara (4105 comments) Go to top ↑

    … is up. Hope you like it.

    • Jeff, Couldn't get the Final Comment charts showing Bill's... [#106482]
      By: rosevillebill (150 comments) Go to top ↑

      Jeff,

      Couldn’t get the Final Comment charts showing Bill’s past staements to enlarge. I’m using Google Chrome. Tried to expand the web page but still unreadable. Would like to archive them off and share with others.

      Thanks,

    • Great as always & definitely enjoy it. You are the... [#106485]
      By: 4ever (612 comments) Go to top ↑

      Great as always & definitely enjoy it. You are the master at calling trends – the final graphs were very interesting. I’ve missed a couple, but overall following along with you has been pretty good.

      Banks had a fantastic week – maybe stress tests should be performed more often going forward.

      Executive pay – it’s controversial, but shouldn’t be. I think going back nearly five decades, executive pay was about 25X the average workers pay. Now, it’s more like 700X. That’s a hefty increase, or as some would say, “Outrageous”. It’s one of the crazy offshoots of our capitalist system gone wrong.

      Most large corporations have high percentage of fund ownership and non-active shareholders. As long as the company performs, nobody cares. Even in times of poor performance, pay is justified because “it could have been much worse if not for the CEO’s actions”. Most board members are hand-picked by the CEO and usually are, or become, best of friends. Nothing wrong with that, except it can lead to “you scratch my back syndrome”. Compensation committees use peer group comparisons to justify pay. Peer companies want their CEOs to be paid at the upper percentiles, because they feel they have attracted the top talent. So, pay spirals up as companies compete.

      Occasionally, there is exceptional talent or vision at the top, like the late Steve Jobs, and exceptional pay is warranted. Most of the time though, CEOs are rewarded for luck or as some like to say, “heads I win, tails you lose”.

      I don’t know much, but I do know 700X is too much.

  34. to Newton GetRich. I suspect there is some bad blood since... [#106483]
    By: bigwad1 (768 comments) Go to top ↑

    to Newton GetRich. I suspect there is some bad blood since Paul has an annual congressional salary of $1.00, and GetRich has legally snubbed his nose at the laws that would put normal working Americans behind bars for years.

    It’s all about who you know…… and what they need to know!

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

  35. Here is an article that speaks against the retrospective... [#106484]
    By: Pierre (96 comments) Go to top ↑

    Here is an article that speaks against the retrospective taxation policy by India ( Take note this is inline with Bill Cara’s views expressed in the WIR)

    http://www.thehindu.com/business/article3009706.ece

  36. Over 50 years ago, my dad moved our family to the "elegant... [#106486]
    By: jock (1011 comments) Go to top ↑

    Over 50 years ago, my dad moved our family to the “elegant section” of St. Louis’ Central West End (where my dad had also grown up – in a late 19th century mansion).

    At the time “north of Delmar” meant poor and black. It was the dividing line. It still is, as the BBC correctly reported this week:

    http://www.bbc.co.uk/news/magazine-17361995

    Some things don’t change …

    (a 4 minute video clip)

    Whither America?

  37. I received mail after posting in the WIR what I have done... [#106487]
    By: Bill Cara (4105 comments) Go to top ↑

    I received mail after posting in the WIR what I have done with Greenfield and what my plans are.

    Greenfield is and will remain a private consulting company. I am planning no outside investment in it, but instead use that company to advise corporate and govt clients. At least one or more of the Greenfield clients will be a public company that will be raising capital to invest in projects or other companies that we recommend.

    Stemming from the CaraCommunity blog, I am going to open a new trader’s hub for junior miners — 100 of them — which will update prices real-time or delayed and have all the news and charts plus my commentary. The software is finished and the 100 companies chosen. I expect to have the app running around the end of the month. That should be a go-to site for people who are interested in investing in junior metals companies.

    Regarding Cara Trading, I am now 99% focused on junior metals for my clients. I think Geoff and I have done well elsewhere and so it’s now up to me (and the market) to get the junior metals going.

    • Bill, Hoping that the Canadian Venture Index continues to... [#106489]
      By: Juniorgoldminerseeker (228 comments) Go to top ↑

      Bill,

      Hoping that the Canadian Venture Index continues to hold firm and show some leadership to those fearful bigger indices, and quality selections from Greenfield will come to show leadership over the catch all venture.
      A Cara 100 with 99% of your focus should create quite some stir.

      I’ve been trying to decide if the market is telling me all I need to know about junior mining. I still can’t see that a gold bull ends in a fizzle at the end of 2010.

      I put some terms into Googletrends to try to see how deluded I’ve become in this gold bubble…

      Terms
      “Junior Gold Stocks”
      “Junior Gold Mining”
      “Junior Gold Exploration”
      “Junior Miners”
      “Junior Mining”

      All returned a googletrends result of …..
      “Your terms – Junior mining – do not have enough search volume to show graphs.”

      I did get a result on “Gold Stocks” I’m hoping you’ll see on the link, the top 4 cities searching were Canadian centres for the industry !

      http://www.google.com/trends/?q=gold+stocks&ctab=0

      Hoping those Mergers & Acquisitions begin in earnest soon and you create one heck of a stir!