Cara’s Commentary & Community Chat, Friday, Jul. 17, 2009

Given the relentless nature of Wednesday

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  1. 2nd_ave(118083 comments)-
    July 17, 2009 at 12:59 pm

    You’re right, it’s a great allegory for this week’s action. I was ready to call it over with the calf half in/half out of the river, but the bulls came through. Unbelievable!

  2. 2nd_ave(118083 comments)-
    July 17, 2009 at 1:04 pm

    “Six weeks into the parabolic rise the losses were measured in 50, 60, 70 points in some of the stocks; who needs stops?”

    Ah, memories of shorting DELL along with the great Fleck. I knew that experience would come in useful some day.

    “We anticipate moving aggressively to a short position in the next few weeks, somewhere between S&P 930 and 1010. Positions will be initiated, monitored, and managed after a set up is triggered; there are no awards for being early.”

    Appreciate the advice.

  3. Bull Hunter(118083 comments)-
    July 17, 2009 at 1:05 pm

    Good morning.


    NOK – to Neutral @ UBS
    NOK – to Market Perform @ Charter Equity

    New Coverage:

    MYGN – Soleil Initiates with a Buy. PT = $35

    PT Raised:

    ADBE – from $31 to $34 @ Oppenheimer. Outperform
    GOOG – from $435 to $500 @ Collins Stewart. Buy
    GOOG – from $465 to $470 @ Jefferies & Co. Buy
    IBM – from $90 to $110 @ Credit Suisse. Neutral

  4. shark_attack(118083 comments)-
    July 17, 2009 at 1:06 pm

    Interesting story about the 90’s. I was a salesman at a scam-media company at the time, but I remember having full gustatory belly-laughs as news broke of each new late 90s “underwriting”.

    And now presenting….3 slackers in a
    I think the height of the nonsense was a stock called
    Remember that one?

    That these companies were frauds was a palpable obvious fact.

    Sorry the timing didn’t work out better.

  5. 2nd_ave(118083 comments)-
    July 17, 2009 at 1:13 pm


    Just two months away? I remember a summer job doing some painting for a retired colleague of my Dad’s in 1972. He and his wife lived in the Barton Hills section of Ann Arbor, which follows the Huron River and the kind of setting where backyard weddings were common. It was a Saturday morning, and I stopped for a sandwich and a soda, when the unmistakable strains of Wedding Song drifted into the yard. I couldn’t find the original version with electric guitar:

  6. vanillabean(118083 comments)-
    July 17, 2009 at 1:15 pm

    Bought a large amount of C at close yesterday. I see it is up pre market on the news below. I seem to go okay buying stocks at the right time, but then I don’t sell them!

    When I bought CNB a few days back, I watched it go up 30 percent the next day but I did not sell. Kept thinking it would go higher.. So, the following day, i lost it all…

    Citigroup profit soars on Smith Barney sale
    Citigroup reports $3B profit on gain from sale of Smith Barney; analysts had forecast a loss
    By Stephen Bernard, AP Business Writer
    On Friday July 17, 2009, 8:43 am EDT


    PS nice commentaries this week!!

    • 2nd_ave(118083 comments)-
      July 17, 2009 at 1:18 pm

      What’s stopping you from taking 6% on a ‘large position?’ 😉

      • vanillabean(118083 comments)-
        July 17, 2009 at 1:30 pm


        I guess I didn’t sell since I had hopes it would go higher.(greed). Then a press release came out that cnb was selling off all the nevada banks so stock went back down.

        So, Do you think I should sell the C at the open or wait to see if it goes a little higher. I have done very well buying these dollar stocks like WGW and selling them after they go up ..50 -1.00, playing the same game with NXG now.


        • 2nd_ave(118083 comments)-
          July 17, 2009 at 1:41 pm

          vb- I would have sold it pre-market at 3.20. Or at the open @ 3.18. Now that the market’s open and it’s pulling back a little, it’s your call 😉

          • vanillabean(118083 comments)-
            July 17, 2009 at 1:56 pm

            I missed selling pre market so I will watch it for a bit longer.

            So, Yes, and thanks for pointing that out to me. In the future, I need to make a plan to sell at 6 or 10 percent increases every time ( instead of 30 percent.) I have been a swing trader, not day trader but with the volatility I might have to shift day trading for smaller and more consistent profits.

            thanks and going to walk the dog now.


          • number2son(118083 comments)-
            July 17, 2009 at 2:07 pm

            Isn’t it swell that banks are doing so great? California has no money for things like emergency services or schools. CSU students are facing a 20% increase in fees and teachers who haven’t already lost their jobs are losing medical benefits (even those who are retired). And that’s just the start of it.

            But none of that matters, just so long as the favored few are made whole.

          • Chickenpookie(118083 comments)-
            July 17, 2009 at 2:39 pm

            “Isn’t it swell that banks are doing so great? California has no money for things like emergency services or schools.”

            Agreed, these banksters are THE sweethearts. I was anticipating oil companies might ride in on their horses to rescue automakers as well…. still contemplating reasons why they didn’t…. and trying to connect the dots.

          • vanillabean(118083 comments)-
            July 17, 2009 at 2:51 pm


            Yes, it is sickening how banks can cook their books and then use the Media to make announcements to fleece the sheeple like me.

            But, learning how they think, has helped me make better trades.

            The Roubini announcement yesterday fooled me. I ate the banana, loaded up on Citibank then find out later he didn’t mean it???

            Roubini – recession is over! HA

            Roubini – I didn’t mean it!

            better go sell my citibank before they clean my clock.


          • Chickenpookie(118083 comments)-
            July 17, 2009 at 3:00 pm

            “better go sell my citibank before they clean my clock.”

            The best part about trading banks is the pleasure I receive from fading their rallies.

  7. 2nd_ave(118083 comments)-
    July 17, 2009 at 1:30 pm

  8. Bert(118083 comments)-
    July 17, 2009 at 1:30 pm

    Right on! The motto of life.

  9. Bull Hunter(118083 comments)-
    July 17, 2009 at 1:32 pm

    PT Raised:

    GOOG – from $500 to $550 @ RBC. Outperform
    IBM – from $120 to $135 @ Caris & Co. Above Average

  10. baz22(118083 comments)-
    July 17, 2009 at 1:43 pm


  11. 2nd_ave(118083 comments)-
    July 17, 2009 at 1:49 pm

    Back to 100% cash.

    I know I said something about not day trading TBT/UNG, but taking my cue from F57 re NGas, and a 2.8% move in TBT is enough.

    TYP? Sold it, and thinking of buying an Impala SS.

  12. teamonfuego(118083 comments)-
    July 17, 2009 at 1:57 pm

    covered my short at $12.9 that I opened at $13.38 yesterday.

  13. teamonfuego(118083 comments)-
    July 17, 2009 at 1:57 pm

    tests 950 today?

  14. baz22(118083 comments)-
    July 17, 2009 at 2:00 pm

    decent news on dialysis drug, but manufacturing issue is close to resolution… maybe will dip to $ 53.30 on Dow low today….

  15. Chickenpookie(118083 comments)-
    July 17, 2009 at 2:02 pm

    We may be exiting 101N onto 80E, the Bay Bridge…. However, we could take 880N from there. It was good seeing the Moffett Field dirigible hangars yesterday, brought back old memories.

    • 2nd_ave(118083 comments)-
      July 17, 2009 at 2:08 pm

      CP- Who needs earthquake insurance, right ‘)

      • Chickenpookie(118083 comments)-
        July 17, 2009 at 2:15 pm

        2nd – Precisely, the bridge retrofit should be complete by now…

    • vanillabean(118083 comments)-
      July 17, 2009 at 3:17 pm

      CP – are you really in the area??

      • Chickenpookie(118083 comments)-
        July 17, 2009 at 3:57 pm

        vanillabean – “are you really in the area??

        My old stomping ground, the fond memories remain.

        • vanillabean(118083 comments)-
          July 17, 2009 at 4:27 pm

          CP, if you are close to menlo park, stop by the rental center on oak grove and say hi! (my day job) We hold open house every day and I am like the social director here.


          • Craig(118083 comments)-
            July 17, 2009 at 4:37 pm

            VB, you’re working with Magic?
            should give you a ringside seat to the econ.

            That should be e-CON….

          • vanillabean(118083 comments)-
            July 17, 2009 at 4:44 pm

            sorry craig, I think that was over my head. Magic?

          • Craig(118083 comments)-
            July 17, 2009 at 5:15 pm

            Well it must be *a* rental center, not *The Rent-a-Center* then….:>)
            Surely you’ve seen the Rent-a-center commercials with Magic Johnson?
            They are running them up here, maybe not in the Bay Area?

          • Chickenpookie(118083 comments)-
            July 17, 2009 at 4:52 pm

            vanillabean – I would love to, I actually lived in San Mateo (Fallen Ave., south side of bridge) many years ago but I’m several thou miles away nowadays. I could’ve been more clear about that but I promise a visit if I’m ever in the area. 😉

          • vanillabean(118083 comments)-
            July 17, 2009 at 4:55 pm

            ohhkay, (now that I have announced to the world where I am — haha) acutually, if anyone is in the area, stop in. i run this office and we have open house all day everyday. real easy kicked back job. I meet econmists all the time, in fact just rented to an economist working at stanford. some of the most brilliant people and I like this situation. but, just so you know.. I get better advice from the people here and reading bill’s commentary.

            gotta run – craig, i also attend the magic show in vegas for my other job with the closeouts and website.


            and happy UNG UNG UNG MARK. :)


          • Chickenpookie(118083 comments)-
            July 17, 2009 at 6:42 pm

            “I actually lived in San Mateo (Fallen Ave., south side of bridge) many years ago”

            Many years ago… I forgot they moved the bridge south and the correct spelling is “Fallon”(Now north side of bridge).

  16. NYUGrad(118083 comments)-
    July 17, 2009 at 2:18 pm

    from last night.

  17. Bull Hunter(118083 comments)-
    July 17, 2009 at 2:22 pm

    GOOG – Target Raised at Goldman to $510 from $486. 2009 and 2010 estimates were also increased to $22.54 from $21.30 and to $24.62 from $23.36 respectively. The co. is expected to benefit from more e-commerce activity, rising international penetration, and easy comps. This should accelerate the co.’s revenue growth rates from mid single digits year over year in mid-2009 to mid-teens year over year in mid 2010. Maintained Buy rating.

    GOOG – Price Target and estimates lifted by Merrill/BofA to $510 from $480. 2009 and 2010 EPS estimates raised to $22.09 and $25.32, respectively. Maintain Buy rating.

    GOOG – Price Target, estimates boosted at Barclays to $495 from $460 after solid 2Q earnings. 2009 EPS estimate raised to $21.93 from $21.24 and 2010 EPS estimate increased from $23.23 to $24.65. Maintain Overweight rating.

    GOOG – FY09 EPS estimates increased at Credit Suisse to $21.61 from $21.07 vs. $19.49 due to reducing its G&A expenses as the co. continues to focus on cost efficiency. The co. reported in-line earnings after beating their estimates, improving their margins, and increasing their gross revenues 2.9% year over year. Maintained rating of Outperform and target of $475 as the firm sees a strong long term outlook while the current slowdown in growth is cyclical rather than secular.

    IBM – Price Target, estimates raised at Merrill/BofA to $130 from $110. 2009 and 2010 EPS estimates increased to $9.86 and $11.05, respectively. Maintain Buy.

    IBM – Price Target, estimates increased at Barclays to $119 from $109 after its 2Q earnings surpassed expectations. 2009 and 2010 EPS estimates increased to $9.80 from $9.15 and to $10.75 from $9.90, respectively. Maintain Equal Weight rating.

    IBM – estimates, target boosted at Citigroup to $135. Estimates also raised, to reflect more cost-cutting. Buy rating.

    IBM – numbers raised at UBS. Price target raised to $117 from $110. 2009 EPS estimates raised to $9.73 from $9.18. Maintains Neutral rating.

    POT – target lowered at Goldman to $96 from $105. High inventories and demand destruction led to the lower numbers. The firm believes that the co. is still searching for a bottom. Maintained Neutral rating.

    SAP – estimates raised at Goldman to $2.02 from $1.98 for 2009 to reflect the movements in exchange rates mainly between the EUR and the USD. Maintained target of $35 and rating of Neutral.

    • bigwad1(118083 comments)-
      July 17, 2009 at 2:40 pm

      Looks like a golden opportunity to short GOOG and go long YHOO.

      With all those investment banks upgrading GOOG, I would imagine the HB&B black boxes are already kicking that can down the alley.

      It’s all a scam………

      • teamonfuego(118083 comments)-
        July 17, 2009 at 2:43 pm

        I wouldn’t short GOOG with your money…not with it down $14.

        • bigwad1(118083 comments)-
          July 17, 2009 at 5:30 pm


          With all the GOOG upgrades today, especially by the numero uno crooks of GS, go ahead and short GOOG and go long yhoo short term.
          There is always a reason for a GS upgrade……ie, don’t let gs be your financial advisor.
          Being a priviledge insider, GS was short GOOG yesterday….Don’t drink their koolaid.

          SAN FRANCISCO (Dow Jones)–Yahoo Inc. (YHOO) shares rose Friday following a fresh report that talks with Microsoft Corp. (MSFT) on an Internet search partnership had accelerated and a deal was imminent.

          The Wall Street Journal’s All Things Digital blog reported deal talks between the two companies on combining their Internet search and advertising operations were “down to the short strokes” and an agreement could be signed within weeks. All Things Digital is owned by Dow Jones & Co., publisher of this newswire.

          Talks between software giant Microsoft and Internet company Yahoo have been taking place on and off since a takeover bid from Microsoft collapsed last year. Both companies are seeking ways to compete more effectively with Google Inc. (GOOG), the leader in Internet search.

          Microsoft and Yahoo declined to comment on the report.

  18. 2nd_ave(118083 comments)-
    July 17, 2009 at 2:26 pm

    I like the analogy to 1999. No fundamental reason for the markets to move higher. However, the higher we go, the more money it attracts, and at some point traders can’t stand to be left out.

    • teamonfuego(118083 comments)-
      July 17, 2009 at 2:36 pm

      2nd – I know its crazy, but consider that if delinquencies cease to rise and actually start falling because of all of the loan restructuring, etc banks have done recently, then that means banks that have been receiving stimulus money from the government don’t have to continue to patch up holes and can use that money to finance business activity. If (and it’s a pretty decent sized IF) this happens I think it will catch everyone off guard as this inflow of funds has a multiplicative effect to it with our fractional banking system.

      • 2nd_ave(118083 comments)-
        July 17, 2009 at 2:47 pm

        tof- No, it’s not crazy at all. If you’re thinking along those lines, then I guarantee a significant number of other traders have the same thought. Which (whether justified or not) adds to the fuel that drives the market higher.

        It’s a paradox. None of us (you being an exception, of course) had any interest in going long the past two weeks. Now that we’ve breached 930, our thoughts are informed by the glass half-full perspective. So we switch from sell the rallies to buy the dips. And the pendulum swings. I have a hard time buying right now, so I guess I’ll be waiting for the return trip.

        • Chickenpookie(118083 comments)-
          July 17, 2009 at 2:54 pm

          “I have a hard time buying right now”

          That’s a pretty bullish statement by my analysis.

      • davefairtex(118083 comments)-
        July 17, 2009 at 3:31 pm

        TOF said – I know its crazy, but consider that if delinquencies cease to rise and actually start falling because of all of the loan restructuring…

        Here’s my thoughts.

        All the folks who basically can’t afford their house (much of subprime) and those who lost (or WILL lose) their jobs (many of the current defaults) and the voluntary walkaways due to being dramatically underwater – they will not be affected by any of the mod programs. Those groups are large enough to dump a huge number of homes on the market.

        Given that right now we are still in the afterglow of the winter foreclosure moratoria, once that fades and the fallout from the spring surge strikes, I think the large number of mods the banks are going to do will make things less worse than they might have been, but that’s not to be confused with “an improvement on the current state of affairs.”

        Remember also, a housing recovery chart does not look like a V-shaped bounce. There is no “short covering rally”. :)

        • teamonfuego(118083 comments)-
          July 17, 2009 at 3:40 pm

          I don’t think anyone expects a v-shaped bounce. Its the floor or bottom that is important.

  19. 2nd_ave(118083 comments)-
    July 17, 2009 at 2:27 pm

    All your numbers are getting hit this morning.

    • MarkW(118083 comments)-
      July 17, 2009 at 2:53 pm

      2nd- Sitting tight for now. Since I’m already “in’ on these positions I’ll let traders chase for a while. Stops now set to preserve rather small % gains, very nice $ gains non the less. It took a while, but averaging down seems to work best for me.

  20. Bull Hunter(118083 comments)-
    July 17, 2009 at 2:34 pm

    July 17, 2009

    Dell (DELL – Analyst Report) reported weak 1Q10 results with revenue and EPS below our estimates, with significant declines from the year ago quarter. Dell expects a modest decline in gross margin for 2Q, impacted by higher component costs, a competitive pricing environment, an unfavorable product mix and weak demand.

    Although the company expects 2Q revenue to increase sequentially, margins are expected to slide as consumers shift from expensive notebook computers towards cheap netbooks and laptops. Also, reduced IT spending as shown by the decrease in sales of PCs and cell phones over recent months is likely to have a major impact on Dell’s server business.

    We believe Dell will continue to struggle, posting inconsistent results in future quarters. We maintain our SELL rating with a six month target price of $8.00.

  21. shark_attack(118083 comments)-
    July 17, 2009 at 2:34 pm

    Despite being Friday, I am looking for possible nice long moves in AUY and SLW. They really are quite undervalued.

  22. shark_attack(118083 comments)-
    July 17, 2009 at 2:40 pm

    long stillwater swc

    • Chickenpookie(118083 comments)-
      July 17, 2009 at 2:50 pm

      You’ve got guts playing against that bearish (doji) star. Is that a contrarian play or did something good happen (Like they announced a rich vein)?

      • shark_attack(118083 comments)-
        July 17, 2009 at 2:58 pm

        Being quite conversant with candles, please assist me Mr. Chicken and tell me exactly where this bearish doji star is.

        I bought it based on the turnaround, the higher low (above Feb) the fact it rose above the 20 day, has a gap on the daily, made an a-up today.

        Of course, the are the indexes to consider and the fact it’s Friday, but call me an optimist.

        I’m in it for the day. If it goes nuts and goes up a fifty cents I will keep some sell the rest. Have a stop set watching golf.

        • Chickenpookie(118083 comments)-
          July 17, 2009 at 3:10 pm

          shark – I wouldn’t worry bout the candle now, Jack jumped over that candlestick this morning (apparently).

  23. Chickenpookie(118083 comments)-
    July 17, 2009 at 2:43 pm

    I’m getting the impression everyone’s anticipating a rally to 1K… Makes me wanna be short.

  24. shark_attack(118083 comments)-
    July 17, 2009 at 3:10 pm

    That doji yesterday didn’t portend anything negative, as it occured not at/near a top but rather a low. It also meant that the price closed near the 20 day and was, in hindsight, a good buy right there. If the market were good I have no doubt this thing would be doing better. We’ll see..

  25. jmorris1950(118083 comments)-
    July 17, 2009 at 3:26 pm
    • baz22(118083 comments)-
      July 17, 2009 at 3:34 pm

      Ouch !… better watch out on the roads… Troopers are writting tickets all over the place… gotta get the money somewhere, and ya’ better believe insurance rates are heading UP…

    • indyrjc(118083 comments)-
      July 17, 2009 at 3:49 pm

      That chart makes the dropoff that occured after the 9-11 attacks look pretty minor. This is going to be one tough recession to get out of. In fact, we will probably have anemic growth for a long time; maybe several years. The United States is no longer an important manufacturing power (just try to purchase an American made product when you shop now) and the whole economy seems to be based only on consumption. With so many jobs being permanently eliminated recovery is going to be tough. The withholding tax chart points out just how bad things are; and contrary to what the government keeps saying they aren’t getting better. The CNBC crowd should enjoy the current stock rally while they can. The shorts may soon be back in control once again; QID may be ready for a turnaround.

      • jmorris1950(118083 comments)-
        July 17, 2009 at 4:16 pm

        The thing that grabbed me is that the drop in withholding tax revenue is so large and likely to be so persistent, that it will literally force governments at all levels (local, fed, whatever) to enact new taxes to make up the difference. They will have their pound of flesh no matter what.

        But raising taxes can’t really solve the bigger problem if Japan and the experience in the U.S around 1933 is any guide. In both cases, raising taxes simply crushed any hope of an economic recovery and sent both economies right back to square one. You don’t need something huge like Universal Healthcare to cause this either… maybe it’s a simple as relatively small hikes in property taxes, income taxes or sales tax. Does anyone really know what the breaking point is?

        So, I just don’t get it. There is just this huge disconnect for me when I read about end of recession, economic recovery right around the corner, etc. Not only is there a huge volume of contradictory data, the whole thing simply defies logic IMO.

        My response over time has been to become a very short-term trader and pretty much ignore everything but the charts. This has worked out alright so far but the cognitive dissonance is wearing after a while.

        • Chickenpookie(118083 comments)-
          July 17, 2009 at 4:34 pm

          Governments need to get out of the healthcare business altogether, cold turkey. This government growth we’re witnessing is contrary to the economic picture, they must either:

          1) Know something we don’t, or
          2) Not understand the natural order of how the horse and buggy are configured.

          They’ve had plenty of time to construct a comprehensive plan IMO…

          FD: Long US industry, short $USD

        • alberio(118083 comments)-
          July 17, 2009 at 4:59 pm

          “…Does anyone really know what the breaking point is?”

          Perhaps it’s more like death by a thousand pin pricks…?

        • davefairtex(118083 comments)-
          July 17, 2009 at 5:29 pm

          jmorris – I too have become a convert to short term trading mentality. I’ve never “believed” in this rally, but lately I’m trading the technical indicators for short term gains and it’s working out all right.

          Last week for instance I bought into the oil rebound with those severely oversold oil & energy stocks. I wrote a bunch of short puts friday and went long monday – just now I sold the last of them with happy endings on all. It’s the best set of trades I’ve had in several months. 5 straight days up? Can’t be beat.

          But this does not reflect some fundamental belief that oil is due to be soon in short supply, or that green shoots will pop the economies of the world back to life. I believe just the opposite, I think in the near term we’re awash in oil. Its just now I’m willing to trade against my long term beliefs and (apparently) make money at it.

          In fact, it seems like when I trade against what I believe, I make better decisions, since I’m only willing to jump in when things are really, really, REALLY oversold… :)

          • Les(118083 comments)-
            July 17, 2009 at 5:50 pm

            RE:>In fact, it seems like when I trade against what I believe, I make better decisions, since I’m only willing to jump in when things are really, really, REALLY oversold… :)

            ditto davef. Don’t want to touch anything unless RSI is hovering around oversold. Anecdotal scraps of evidence (unable to borrow aapl stock etc) suggest that the pros are supporting the market for the moment, which makes a swing trade less risky.

          • Vadym Graifer(118083 comments)-
            July 17, 2009 at 5:51 pm

            Dave… welcome to the world of “trade what you see, not what you think” :)

            A trader’s job is to make right trades, not to be right on underlying economy/sector/company prospects. Those are not necessary connected directly to the market movements, especially in short term.

          • 2nd_ave(118083 comments)-
            July 17, 2009 at 6:57 pm

            Vad- I only started reading Tim Knight’s blog two days ago. But I’m trying to reconcile what seems to be a well-known trading rule with what Knight is doing:


            “Unless some miracle happens tomorrow, this will go down as the worst week in my life as a trader. On the whole, I did a very good job following my rules, so I don’t have a lot of beating-myself-up to do. The simple fact is that I was very badly positioned for this rally (to say the least), and this run-up, for me, was quite unexpected. I will climb out of this hole, but it’s going to take a heck of a lot longer than four days.”

            The above entry was from yesterday. My take is that he held on to his ultrashorts last night in the hope the market would move his way today. I assume he’s a pro. And he claims he’s been following his ‘rules.’ I also have to assume his ‘followers’ are doing the same. Has he made an error in judgment? If he’s using a different time frame, how does that ease the short-term pain?

          • Vadym Graifer(118083 comments)-
            July 17, 2009 at 7:04 pm

            I am sorry 2nd, I don’t feel comfortable commenting on someone’s trading, especially without knowing anything about their approach.

            I have great respect for anyone who has balls to make public calls and follow through honestly. Trust me, this is no small feat.

            If the trade development hasn’t gotten out of his pre-determined risk parameters, there should be no reason for pain – no one becomes always profitable from the moment of entry and never endures a pullback. If it has, stop should be applied – no one wins them all.

            Brutal honesty he demonstrates in the quote you cited tells me he will be just fine whether he wins this particular trade or not. People talking like this are ultimate winners.

          • 2nd_ave(118083 comments)-
            July 17, 2009 at 7:19 pm

            “Brutal honesty he demonstrates in the quote you cited tells me he will be just fine whether he wins this particular trade or not. People talking like this are ultimate winners.”

            Vad- Good answer.

          • kaimu(118083 comments)-
            July 17, 2009 at 6:08 pm

            ALOHA !!

            Nice to see Barry finally caught up to my theory …

            That’s the same website I use in my weekly articles entitled “REVENUE BREAKDOWN-Obama’s Spending Spree” that are published over at GATA.

            Then Barry some day will make his way over to the US TREASURY FINANCIAL STATEMENT, because you cannot see a complete picture of a collapsing US Dollar by just looking at the “receipts” side … you need to see the outlays as well. Perhaps some day in the future Barry will figure out how this all ties into the destruction of the US Dollar and that TIM and BEN and OBAMA really do not care one iota about a STRONG DOLLAR POLICY. Then Barry will eventually figure that this could indicate a serious collapse in US Sovereign Credit Rating(whether officially announced or not)and lead to a monetary crisis.

            Anyone get that you cannot SPEND YOURSELF TO PROSPERITY?

            Then you get the SEEKING ALPHA people today, who are just now figuring out that JP MORGAN and HSBC will use the gold and silver from the ETFs over at the COMEX. The day these ETFs started that was my first thought and I posted that here.

            GLD LINK:

            Let me again warn those who hold GLD and SLV from a historical perspective that there has never been an honest “warehouse receipt” for gold in all of mankind’s history. This is classic bait and switch from Medieval times. GIVE US YOUR GOLD AND WE’LL STORE IT FOR YOU …

            But in this case HB&B is trading in your FRN IOUs so they can load up on GOLD and SILVER at your expense.

            I have posted here before proof positive that JP MORGAN is an agent for the US FED and is immune from prosecution(aka BLANCHARD COIN).

            Do not hold GLD or SLV as a hedge against a US Dollar collapse. You will be helping JP MORGAN not you and your family.

            Come on guys!!! Since when has the name JP MORGAN meant anything other than fraud? WIKI it and read their past history … DO the same for GOLDMAN SACH and you will see Goldman Sachs was barred way back in 1928 from securities and had to file BK … THEY’RE BACK!!!

            It is my sense of “morality” that keeps me from supporting these banks by buying or trading their products. At some point one must take a stance against these banks.

            Amazing …

  26. Craig(118083 comments)-
    July 17, 2009 at 3:27 pm

    So did anyone see the triangle break on these today?

    I sat there with my thumb…in a pie and didn’t act….


  27. Craig(118083 comments)-
    July 17, 2009 at 3:32 pm

    To my credit I did see UUP moving up PM and took profits on TBT.

    BUT I hate missing a move on FAZ from a 41 handle to 43, what a moron.

  28. teamonfuego(118083 comments)-
    July 17, 2009 at 3:37 pm

    so of the S&P 500 companies that have reported thus far, 71% of them have beaten earnings and earnings are down 18% in total as compared to Q2 last year. Q2 last year had operating earnings of $17/share. 18% lower than that equates to roughly $15/share for this quarter. the S&P 500 is approximately 25 to 30% lower than it was at this time last year.

    I don’t see this as terribly bad. You can actually make an argument that the downturn has been worse in stocks than earnings…

    • proudPapa(118083 comments)-
      July 17, 2009 at 5:23 pm

      I guess since the market tries to price in expectations which are for lower future earnings. The trend in foreclosures/delinquencies/unemployment is still up, consumption/credit growth is still down, so it’s unlikely earnings will grow from here.

      Also, it’s been mention (i think by Bill) that a lot of the earnings growth/stability has come through cost cutting, and there’s only so much of that before they can cut no more.

  29. CaptK(118083 comments)-
    July 17, 2009 at 3:41 pm
  30. Craig(118083 comments)-
    July 17, 2009 at 3:41 pm

    The bullish sentiment is getting as overdone now as bearish sentiment was last week. Now everyone is on the long side of the boat….and 1000 + is a foregone conclusion? Makes me nervous.

    • Chickenpookie(118083 comments)-
      July 17, 2009 at 4:10 pm

      Something’s holding us back…. the bear/bull wrestle that didn’t materialize yesterday is happening today? There was tremendous momentum yesterday(lack of resistance?), can the Bulls win today or tomorrow?

  31. fireworks(118083 comments)-
    July 17, 2009 at 3:48 pm

    While those in NY obsessively defend the gold $940 level, reports out of Europe indicate major demand for physical gold bullion…

    Swiss news website 20 Minuten Online reports that Swiss banks are running out of secure storage space for gold bullion held by investors and institutions. Fears of hyperinflation, the economic downturn and the success of gold index funds (ETFs), which are supported by physical gold, has led to a run on precious metals investment – and in gold in particular, and in the necessary secure storage space in which to hold it..

    One Swiss bank, earlier this year, reported that it was having to relocate some of its stored silver bullion to another site to make room for gold. The Zurich Kantonal bank put this down to the success of its gold ETF.

    The website reports another Swiss investment banker despairing “We have the need to store more gold for our clients but are finding it difficult to find secure storage facilities”. Gold storage makes high demands on security which is what is making the gold holding task more difficult. Few banks will divulge exactly where their gold is stored for security reasons.

    Another banker reported that his bank still had space but that it is beginning to run out.

    • Schleppy(118083 comments)-
      July 17, 2009 at 4:25 pm

      Sounds like an opportunity for an entrepreneur……of course some say Ft Knox is empty so maybe the gov’t can rent that out as storage.

  32. baz22(118083 comments)-
    July 17, 2009 at 3:58 pm

    ” The U.S. Navy is putting finishing touches on their new lab in Norfolk, VA. for detection of H1N1… the lab will handle cases on ship and shore, in a massive area from the Mississippi River, across South America, the Atlantic Ocean, Europe, the Middle East and Antarctica…. a similar unit in San Diego will handle the rest of the world…. included is a labratory rated at Biolevel 3, for even more dangerous diseases…. Instead of 2 weeks, results will be in 48 – 72 hours…..RNA samples are removed from test swabs.. a companion replicator reverse transcribes them into DNA ( ** ) and uses enzymes to copy thousands at a time… dye markers pinpoint any H1N1 contamination…… The US Navy has confirmed 470 cases since April, 09′ “………….

  33. baz22(118083 comments)-
    July 17, 2009 at 4:03 pm

    Not from Vical themselves….

  34. ez_money(118083 comments)-
    July 17, 2009 at 4:10 pm

    no way natural gas maintains these levels….

  35. michael3442(118083 comments)-
    July 17, 2009 at 4:19 pm

    Posted TA of the NatGas contract and UNG charts on another site; thought y’all might be interested.


  36. jmorris1950(118083 comments)-
    July 17, 2009 at 4:34 pm

    This is just too weird. Some guy who trades via ThinkOrSwim is having his Apple short position forcibly closed because its share’s have become ‘hard to borrow.’ Apple??? Where’s the Supplemental Liquidity Providers when you need them?

    • nemo(118083 comments)-
      July 17, 2009 at 4:54 pm

      Does anybody know who runs zerohedge?

      • 2nd_ave(118083 comments)-
        July 17, 2009 at 5:28 pm

        If it’s true, I would be going long AAPL.

        What’s max frustration right now? I think they close the indexes at the highs.

        No positions until after 3 pm.

        • Schleppy(118083 comments)-
          July 17, 2009 at 5:39 pm

          Traders back from lunch…volumes picking up..expecting a push to 950

      • jmorris1950(118083 comments)-
        July 17, 2009 at 5:47 pm

        The guy who calls himself Tyler Durden (From the Fight Club movie) is anonymous although supposedly well-connected. He absolutely has a point of view and you have to bear that in mind as you read his stuff and opinion. He is almost always entertaining at the very least.

        • NYUGrad(118083 comments)-
          July 17, 2009 at 6:18 pm

          so i guess we can expect a small pop in aapl at 3pm when these sleaze bags liquidate the short positions on behalf of their clients?

    • camelback(118083 comments)-
      July 17, 2009 at 5:22 pm

      that’s aap not aapl. but still…

  37. shark_attack(118083 comments)-
    July 17, 2009 at 4:45 pm

    Bring it on. We need it. Let the expensive private companies compete side by side with the government plan.

    I know from personal experience that expensive private insurance, while very good and effective, represents an ENORMOUS expense for all but the fortunate few.

    There’s more. Health insurance becomes, under our present system, another coercive tool used by employers to threaten and control their employees.

    Hey. Call me a socialist. I’ve been called a hell of a lot worse.

    I have more to say on this subject but am too busy right now.

  38. baz22(118083 comments)-
    July 17, 2009 at 4:48 pm

    British Open…. get em’ Tom….( just don’t have a putt of more than 10 ft.,,, well, maybe 2 ft. !! ) what a Great ball striker at age 59… dang….

  39. shark_attack(118083 comments)-
    July 17, 2009 at 4:48 pm

    got long yamana about an hour ago.

    slw also looking like a champ.

    • NYUGrad(118083 comments)-
      July 17, 2009 at 6:01 pm

      but no volume. trust me, i want them to rocket too

  40. westcoaster(118083 comments)-
    July 17, 2009 at 4:49 pm

    Thanks all for what you are doing here. I don’t have much time to join the discourse, but do usually enjoy the skim and like the learning and trading ideas. It helps us all to learn to make tough decisions. Yesterday I finally gave up on oil co. shorts and went long su; re-established positions in aapl and jpm. one’s a great company, one’s a dominant, powerful company. Amer will do what’s best for Amer, and JPM will reap spoils. Holding WPRT and as well. For now it feels good, and I know that is a sign that danger lurks. Enjoy the dog days of summer!

  41. photogray(118083 comments)-
    July 17, 2009 at 5:06 pm

    Please I would like to hear all viewpoints. I am up 4.5% in a partial position of AUY. I want exposure to pm’s but taking profits is an almost alien concept to me. I would rather build on this position but I have been down for so long it looks up to me
    peace from beautiful North Puget Sound

    • jmorris1950(118083 comments)-
      July 17, 2009 at 5:11 pm

      The primary maxim is ‘when in doubt, sell half.’

    • shark_attack(118083 comments)-
      July 17, 2009 at 5:12 pm

      You’d be nuts to sell yamana here. Plain and simple me amigo.

    • Craig(118083 comments)-
      July 17, 2009 at 5:12 pm

      Why not move your stop up and let it run?

      Hope it’s as nice in the North Sound as down here….

  42. jmorris1950(118083 comments)-
    July 17, 2009 at 5:18 pm

    There has been a lot of stuff about how resilient the market has become because the Feds refused to bailout CIT and the market just shrugged. Perhaps this is one good reason why.

    • Schleppy(118083 comments)-
      July 17, 2009 at 6:09 pm

      Wonder how much JPM and Goldman are making trading in and out of CIT right now. Probably were front running ahead of the news…..made a boat load, dumped the shares at 2:00 pm, rinse and repeat.

  43. Craig(118083 comments)-
    July 17, 2009 at 6:00 pm

    2nd, keep an eye on XLF, it’s back to where it broke down this AM…YES, I rode FAS back up to this resistance 12.195, if XLF breaks this little flag it’s going up with the general mkt and so will FAS.

    BTW, I’m loving these Scottrade advanced conditional orders!

    Hmmm, maybe not, but who cares? I took profits on FAS at 48.08, I can wait….

  44. David(118083 comments)-
    July 17, 2009 at 6:07 pm

    I see that UNG made another nice move today. I don’t think, however, that it will close above $14 today, and so I will most likely be assigned my July $14 puts that I sold a month or two ago at $1.20, which will give me some UNG shares at the cost basis of $12.80. I have just sold August $15 covered calls on these shares at $0.5. If these shares are taken away from me, then so be it — I already have a decent size core position in UNG, and so I can “trade away” the extra shares I will get today through option expiration.

    • Craig(118083 comments)-
      July 17, 2009 at 6:12 pm

      There’s some overhead to get through before UNG hits $14. It might take some time or a hurricane.

  45. Fox1(118083 comments)-
    July 17, 2009 at 6:21 pm
    • alberio(118083 comments)-
      July 17, 2009 at 7:13 pm

      Fox1, interesting. The one question I have is how far in advance would you have been able to see the positive flip that occured during the first week in May?

      • Fox1(118083 comments)-
        July 17, 2009 at 7:45 pm


        Senkou span A (green line of kumo) crossed senkou span B (red line) around 5/6. You would have seen the leading edge of the cross on 3/31 (approximately 26 periods). Price closed above the tenkan sen on 4/1 and above the kumo on 4/8.

    • johnuk(118083 comments)-
      July 18, 2009 at 12:48 pm

      Fox1 ,thanks for discussing the ichimoku cloud indicator.
      Here is a link to Daily ,weekly and monthly charts for major FX(with commentary by Nicole Elliott) I often peruse that utilise the Ichimoku cloud indicator.

      • Fox1(118083 comments)-
        July 18, 2009 at 2:03 pm



        I learned the system from Chris Capre over at 2nd Skies. I like it a lot on the USDJPY and others.

        Pip pip hurray!

  46. jmorris1950(118083 comments)-
    July 17, 2009 at 6:25 pm

    sell AUG 50 puts/calls @ 4.20 credit. Breakeven at expiration between 46.27 and 55.76. IWM is currently overbought and running up against technical resistance on both daily and weekly charts.

    I think it pulls back a bit over the next few days. A move over 54 will force an adjustment of some kind.

    I am currently holding IWM AUG 51 inverse straddle at a net profit and will be looking to close out the short put leg and/or whole position in the next few days.

  47. baz22(118083 comments)-
    July 17, 2009 at 6:26 pm

    gsi..? if so, congrats on a good health % chunk.

    • Chickenpookie(118083 comments)-
      July 17, 2009 at 6:50 pm

      baz22 – gsi – hmm – That one fell into the bit bucket, I never bought in. FTWR has been doing reasonably well but I’m concerned with the volume… LECO,MTW,OCNF are my current longs.

      • baz22(118083 comments)-
        July 17, 2009 at 6:58 pm

        don’t know what you think of ‘ NM ‘, but balance sheet is pretty good with good contracts… I sold ‘ DRYS ‘ a tad early ( off the $ 5.10 buy early last week )… still a lot of negative thoughts out there on the Baltic ( with some logical reasons ), but it does pay to ‘ trade the doubt ‘ if the charts are ok…..

        • Chickenpookie(118083 comments)-
          July 17, 2009 at 7:12 pm

          I’ve been interested in both NM and NMM, NMM is the more interesting of the two (in my current analysis) but I’m twice shy on dividend stocks sittin’ on the fence. Toss-up? I’ve been wanting NUE as well.

  48. davefairtex(118083 comments)-
    July 17, 2009 at 6:31 pm

    So I”m seeing one of two things happening in UUP. Either its forming more or less a double bottom (which would be bearish for gold et al) or that MACD rollover tells us a new bearish trend is being established in the buck, which would be quite bullish for gold. And gold is right now at its 940 resistance level.

    So right now I’m out of all my PM and my energy. Its probably the best time to do one of those straddles, since the move in either direction should be pretty impressive.

    • Chickenpookie(118083 comments)-
      July 17, 2009 at 6:58 pm

      davefairtex – good observations, to that I add Bill’s recent PM call. The market’s got to move the same direction(as PM’s) as well, I would expect…

  49. shark_attack(118083 comments)-
    July 17, 2009 at 6:31 pm

    out of swc 6.09

    still in auy

    slw rising

  50. jmorris1950(118083 comments)-
    July 17, 2009 at 7:06 pm

    At the risk of cementing my reputation as a fanatic, here is a bit more on high-frequency trading. You have to admit it’s damn interesting…

  51. Les(118083 comments)-
    July 17, 2009 at 7:09 pm
    • Chickenpookie(118083 comments)-
      July 17, 2009 at 7:16 pm

      Is there no mention of “Deep Storage” in the GLD prospectus? I wouldn’t be surprised…

    • kaimu(118083 comments)-
      July 17, 2009 at 9:33 pm

      ALOHA !!

      I have put myself on record here as predicting that HB&B will confiscate your GOLD via these ETFs. These ETFs would have made FDRs job 1000 times more easier, since who needs to open up a bunch of safe deposit boxes at numerous banks when you can con the public into buying gold for you and putting into your own secret vault!

      In my last weekly article I gave a rundown on the entire FDR gold confiscation and how it played out. I even had a GOLD CONFISCATION TIME LINE that extended from FDR in 1933 and ended at JFK in 1962. Just in brief FDR, while in office wrote up 3,728 Executive Orders and of course the means by which he confiscated gold was through Executive Orders. Of course the US Congress helped out with the Trading With The Enemy Act and the Emergency Banking Act but FDR was the “expert” at stealing what did not belong to him labeling those Americans who held gold as “hoarders” and “anti-American”. So by his actions the US government felt it could hoard gold better than its own citizens.

      In his first Executive Order to confiscate gold he claimed that he “was forced” to take action due to a run on banks, but then he forgot to mention it was an “emergency” and to actually give that “emergency” a name, so he issued another Executive Order to cover that slip up. Then he and the banking elite forced the US Congress to run through the Emergency Banking Act. That whole con started on March 9, 1933 in the House at 7:30am. By noon it was in the Senate and that night it passed the Senate and FDR signed it into law. The House was allowed only 40 minutes to debate it, but the problem was that none of the representatives had a copy of the Bill and only the Speaker had a copy. The name of the person or entity who authored the Bill was unknown. There is much more detail than what I am giving here, but it is obvious that the whole gold confiscation was ordered by the banks and the entire mess was a hodge-podge of legislation to try and cover all their bases. Even FDR in one Executive Order mandated that all the gold confiscated would be put into the US FED, but then he forgot to say that the gold would be the property of the US government so he issued another Executive Order to cover that mistake.

      You would be astounded at how FDR made felons of every US citizen who owned gold. For 58 years it was a felony for a citizen to own gold in the USA without a US TREASURY permit! Even in 1962 JFK made it illegal for a US citizen to own gold outside the USA! Each President starting with Wilson claimed they had these powers due to the emergency of WW1 … Even though WW1 was over 58 years ago, they kept coming up with new “emergencies” including the COLD WAR and Vietnam! Sorry to say though the COLD WAR and Vietnam were not “real wars”, were never DECLARED a War by Congress, so where is the “emergency”?

      Now we have a new “emergency” … Anyone here doubt that OBAMA, as some have labeled FDR Jr., wouldn’t do the exact same thing as FDR did? The elected leaders we have now are even bigger crooks than in FDR times. Where would they start? GLD and SLV!

      We, as in WE THE PEOPLE, have to stop re-electing the same trash REP & DEMS if we are to survive as a viable society. Remember that “Home of the Free and the Brave”? The US Constitution? Declaration of Independence? Any of that ring a bell?

      Imagine if our Founding Fathers were alive to see FDR stealing the PEOPLE’S gold and labeling us felons. FDR would be hanging from a lamp post on Pennsylvania Ave if our Founding Fathers had anything to say about it and so would the current den of thieves in DC!

      WE THE PEOPLE can no longer afford to just throw votes away to the “lesser evil”, because there is no “lesser” they are all the “greater evil”! The two party POLITBANK system must die for anything close to real CHANGE to happen in America.

      Next time you VOTE you must VOTE like your very life depended on it, because it certainly does. There is no more time to wait and HOPE!


      • davefairtex(118083 comments)-
        July 17, 2009 at 10:06 pm

        Kaimu, I believe that the next election will be quite different from this one. The likelihood of a default by the US by then and the difficulties that will cause will almost assuredly be laid at the foot of wall street and the banks. Its easier when they make such absurd amounts of money while everyone else is suffering.

        When the US runs out of money, and the people realize that the Fed and the Treasury took the last lifeboat left and gave it to their friends in New York, they will be very, very unhappy. The republicans will try to say they were uninvolved, but 8 years of bush will put the lie to that. The democrats, of course, will have given us Geithner, Summers, and another 3 years of coddling the banksters. I think this sets up a perfect opportunity for an independent candidate.

        At that point, some enterprising politician will figure out he can ride a tidal wave of discontent into power by scapegoating the banking world. We just have to be careful not to vote in the moral equivalent of National Socialism when that happens.

        • navid(118083 comments)-
          July 17, 2009 at 10:14 pm

          Thanks Kaimu, your writing has an effect and the repetition is valuable. It is almost like the antidote to the mainstream media propoganda.

          I heard today that this administration has talking points that they publish and weekly calls to frame the issues for congress. I suppose every administration does this, but it was more sinister in a way because it has taken on the well-greased methods of a corporate PR department.

  52. NYUGrad(118083 comments)-
    July 17, 2009 at 7:14 pm


    And “R2” should read “R1”

    • NYUGrad(118083 comments)-
      July 17, 2009 at 7:21 pm

      Accompanying explanation of H&S

      As an aside, many people believe the inverse h&s on gold is invalid since it is not reversing a downtrend, rather forming at the end of an uptrend.

  53. teamonfuego(118083 comments)-
    July 17, 2009 at 7:18 pm

    I posted this a long time ago on this blog that in my long term investment account I only track the 200 DMA of the S&P 500 and how the S&P is faring compared to it. If the S&P closes 3% above the 200 DMA for a full week after being below it, then it is time to buy stocks. And if the S&P closes 3% below it after being above the average, then it is time to sell stocks. I tested this strategy with the S&P 500 back to 1950ish and with the DOW back to the 1920’s and it worked about 90% of the time.

    In December 2007, the S&P 500 moved 3% below it’s 200 DMA after being in a significant up trend from 2003 and being above the moving average. It was at that point that I decided to sell my holdings in this account and move it all to a money market account. Fast forward to this week, 19 months later, and it finally moved to 3% above the moving average for an entire week.

    I like this strategy a lot just because you don’t have to speculate about the economy and all of the other noise going on. You just look at a long term trend and buy/sell/hold. It has worked for me quite nicely in this account for what it is worth.

    • Chickenpookie(118083 comments)-
      July 17, 2009 at 7:42 pm

      Thanks for reposting, I like that strategy as well. Was your back-test with the 200 SMA, or 200 EMA?

    • G(118083 comments)-
      July 17, 2009 at 7:48 pm

      TOF – thanks for the post!

    • 2nd_ave(118083 comments)-
      July 17, 2009 at 10:26 pm

      tof- Wow. So based on that strategy (no guarantees, I realize), and from a long-term perspective, the signal is to now buy the total market?

      Do you mind explaining the theory, or how it originated?

      • 2nd_ave(118083 comments)-
        July 18, 2009 at 12:11 am


        After further thought, it does make sense from a long-term perspective.

        (a) In 2007 we were at 14000/1500, and 10000/1000 sounded like a long way down. We greatly exceeded those downside targets, which then completely revised (maybe a better word is distorted) our points of reference. What is 8700/940, after all? These numbers are still way below the initial downside targets. 6500/666 may reflect momentary over-reactions, and 8700/940 a more reasonable ‘bottom.’

        (b) With that in mind, we may now be sitting at a ‘bottom’ that runs sideways for several months, before spiking to 10000/1000 (the original downside figures). We may then bounce between 8500 and 10500 for another period of time, before ‘recovery’ takes us quickly back to 14000 and beyond.

        (c) The other question that comes to mind is: How exactly did we expect the indexes to rebound to 8700/940? In orderly fashion? Come on. The market got us here exactly the way it always does– unexpectedly, and by frustrating the maximum number of traders. The move this week has the mark of Zorro.

    • Mackinaw(118083 comments)-
      July 18, 2009 at 9:22 pm

      Nice to be back after a wonderful holiday visiting my Goddaughter!


      You might find this quasi-scholarly paper interesting – A Quantitative Approach to Tactical Asset Allocation. I too have incorporated 200 MA ideas into my long term account management.

      • 2nd_ave(118083 comments)-
        July 18, 2009 at 11:01 pm

        Mac- That’s an excellent paper.

        I can see that some form of timing, as long as the system itself is free of human emotion, and assuming one has the discipline to follow it, will generally outperform buy-and-hold.

        My thoughts:

        (a) There is actually an element of buy-and-hold to the timing model. The model outperforms buy-and-hold, but there are significant drawdowns. Personally, I would have a hard time with some of those drawdowns. Any of us would. For instance, how many of us were ‘OK’ with a 40% hit in 2008? Well, some of the drawdowns in the timing model approach that number. I know myself well enough to say I will not be OK with those kinds of numbers again in my lifetime. Yet the timing model requires you to stick it out when that happens.

        (b) Anchoring. I like that term. Going back to an earlier post, I would say that most of us are now ‘anchored’ to 6500/670 in some way, and that it distorts our expectations. So a timing model would help to counter the distortion.

        (c) The timing of the decision to use a timing model. I haven’t crunched any numbers yet, but my guess is the model would have you fully invested right now. We are 7% above the 200 SMA, and the model only ‘checks in’ once a month anyway. For those who cashed out in 2007 (when the model flashed a sell signal), hey, no problem- time to get long again. For those who cashed out at the bottom- I would be really surprised to see them move back to fully-invested right now. It would take superhuman faith in the model.

        (d) Information overload. The author points out in the appendix that investors who follow the market on a daily basis and end up trading excessively do worse than those who seldom follow the news.

        (e) Overconfidence. The author also brings up the well-known fact that 80% of students consider themselves to be in the top half. We can easily transfer those numbers to traders.

        Based on all of the above, and knowing myself (or my self) the way I do, I would have to go with:

        (f) Variations on the model (or more appropriately, using the model as one of many decision-making tools). Based on my concerns about the drawdowns, and based on the fun I have trading, I prefer to view the model as a means of adding a significant edge to investing. My thoughts would be to:

        (i) Move the buy-and-hold half to fully invested, as long as the indexes remain above the 200 SMA.

        (ii) Trade the long side with added confidence as long as the indexes remain above the 200 SMA.

        (iii) Trade the short side with added confidence when the indexes drop below the 200 SMA.

        (iv) Modify the technique by applying it to the most appropriate index for the positions I’m trading. For example, I might use XLF if looking for an edge trading FAS/FAZ, or XLE if trading ERX/ERY.

  54. NYUGrad(118083 comments)-
    July 17, 2009 at 7:23 pm
  55. Chickenpookie(118083 comments)-
    July 17, 2009 at 7:26 pm

    “CIT in talks With Goldman, JPMorgan for Financing”

    That would be Rothchilds/Bildeberger, wouldn’t it?

  56. weekender823(118083 comments)-
    July 17, 2009 at 7:35 pm

    Hello all,

    I’ve been lurking here for some time, but rarely post because I don’t trade other than occasionally shuffling my 401k. That will change in September when I roll a retirement account from a previous employer over to a self directed IRA. I still work a day job, so won’t be a daytrader watching the screen all day. Based on what people have posted here I and checking their website I am thinking Interactive Brokers.

    If anyone has comments on IB, pro or con, I would like to hear from you.

    Thanks to all for posting and especially to Bill for an amazing site!

  57. Les(118083 comments)-
    July 17, 2009 at 7:43 pm

    border. I have only one remark to make on this ongoing story, having heard it from Carl Weinberg on Bloomberg on the Economy. Japan has already sold of $100 billion in US debt in the last three years and he suggested that they’ll need to get rid of more to provide liquidity.

    Is it a far stretch to suggest that they’re silently dumping more to save their own butts, with a government that is broke and in need of cash, and at the same time get rid of the millstone around their neck that is USD without shaking the debt market?

    I would be interested to know how two Japanese officials managed to get picked up as well. I cross that border a few times a year and recognise that the agents, both financial police and customs, have a profile that they’re looking for. Since when did two Japanese “businessmen” fit the bill of smuggler/launderers, and how do you connect these people with the Italian Mafia.

    This issue stinks of something…

    • Chickenpookie(118083 comments)-
      July 17, 2009 at 7:55 pm

      The issue does kinda have a foul odor about it, I read somewhere that the US Treasury claims there were never any Treasuries of those denominations ever issued, and so conclude they are counterfeit… hmmm….

  58. David(118083 comments)-
    July 17, 2009 at 7:45 pm

    Thanks, 2nd_ave, for mentioning this movie. I tried ordering it through Netflix, but it is currently not available. I saw, however, that it was directed by Andrei Konchalovsky and it was nominated for a Golden Palm at Cannes. I like movies with such credentials. About a year ago I went through the list of all movies that won Grand Jury Prize and Golden Palm at Cannes and added to my Netflix queue those that were available at Netflix. As a result, last week we watched “Sibiriade,” (winner of Golden Palm in 1979) which was also directed by Andrei Konchalovsky and which was excellent. If you haven’t seen it yet, then I would highly recommend it.

    • Vadym Graifer(118083 comments)-
      July 17, 2009 at 7:48 pm

      David… find it, you’ll love it. The best one by Konchalovsky IMO, absolutely mesmerizing.

    • 2nd_ave(118083 comments)-
      July 17, 2009 at 7:49 pm

      David- I will, thanks!

  59. baz22(118083 comments)-
    July 17, 2009 at 7:46 pm

    OK, Supposedly Vale wants MOS… CF wants TRA…. AGU wants CF…. who wants MON ? My thinking, however, is someone ( BHP ?? ) may actually make a bid for AGU…. would be less regulatory hurdles ( vs. the AGU/CF deal )… I believe AGU has the best revenue flow of the ag.’s…. as for MON, well…. ya never know….

  60. 2nd_ave(118083 comments)-
    July 17, 2009 at 7:48 pm

    Cash for the weekend.

  61. davefairtex(118083 comments)-
    July 17, 2009 at 8:15 pm

    Exited my longs today except for SLW, TBT and CEF. Opened shorts at end of day on a few things that look to be at resistance points with RSIs > 70 and that had intraday reversals.

    Several OTM calls expired today – OTM. I’m noticing that buying calls is most often a losing strategy, while I almost always make money on my put writes.

    • Les(118083 comments)-
      July 17, 2009 at 8:21 pm

      RE:>I’m noticing that buying calls is most often a losing strategy.

      oof, I’ve worked that one out the hard way. Have yet to develop the rhythm of selling options at oversold and overbought positions.

  62. Les(118083 comments)-
    July 17, 2009 at 8:19 pm

    This guy takes gold as payment for his business services, so you know where he stands on fiat money, but if you read these two articles and the one I posted beforehand (“stirring the pot”) then one can see he is a keen observer and reasonably astute analyst of the USD.

    He smells a bank holiday coming in order to debase the USD. What would be the likelihood of this? I mean, is it something we can contemplate as being realistic? And where would you want to be invested, if such an event should occur? Does one buy up hard assets? Commodity producers?

  63. David(118083 comments)-
    July 17, 2009 at 8:26 pm

    I felt that the market was very overbought a month ago and so I did not sell many July puts. I did sell July $15 call on UNG at $0.6 during the last UNG spike to $14.70, and this call happily expired today, lowering by $0.6 the cost basis of the UNG shares I used as a collateral (about 1/4 of my whole position). At the same time, the July $14 put I sold on UNG in May for $1.20 also expired today, expanding my current position by about 30% at a cost basis of $12.80. As I posted earlier today, I sold August $15 covered calls on these shares for $0.5 and lowered the cost basis further to $12.30 (unless these shares are taken away from me at $15.50, which is also OK with me. :)).

  64. davefairtex(118083 comments)-
    July 17, 2009 at 8:49 pm

    The SPX closed today at resistance at 940, now having a daily RSI of 74. If it breaks above 960 that should cause a stir (all those shorts being covered and all) but I think that will not be too easy given the RSI. Since May, we’ve just been moving around inside a trading range. Shall we assume that continues? If so, now is a relatively low risk time to do some selling.

    All of the moves outside the range have been head fakes so far.

    And that is why I sold my longs and entered some new shorts. However, my position sizes these days tend to be a lot smaller than earlier this year, since I’m not at all confident which way things will go.

  65. Chickenpookie(118083 comments)-
    July 17, 2009 at 8:54 pm

    I certainly liked that Carvel-close, wonder if the bears went short?

  66. NYUGrad(118083 comments)-
    July 17, 2009 at 9:05 pm

    Doesnt look as ominous as the daily.

    But that macd better curl up soon. prices are still contained in the channel. If buying volume shows up I would watch for resistance at 200 ma $9ish or a little higher. It will take a real push to get to the top of the channel which measures $12+.

  67. davefairtex(118083 comments)-
    July 17, 2009 at 10:34 pm

    So I just noticed that there is a way to buy VIX futures using an ETF called VXX. It has just made a double bottom, and this second bottom has been on some pretty nice volume. I’m guessing VIX will spike regardless which way the market goes – either up or down. RSI is 27.94. VXX is too new to have a real weekly chart, but the “related” weekly chart for $VIX shows an RSI of 28, and an MACD that’s slowly curving up. Monthly RSI for VIX is 36.

    52 month high: 90. 52 month low: 10. Now that’s what I call price movement!

    Unfortunately there are no options for VXX.

    I mean, I should probably figure out more about volatility before just jumping in, but – the RSI 27/28/36 along with the double bottom just says “buy me.” Is this the new UNG, destroyer of accounts? It has that favorite feature of ours, rolling futures contracts, AND an .89% fee to boot. :)

    Counterparty risk: Barclays

  68. Bill Cara(118083 comments)-
    July 17, 2009 at 10:42 pm

    I’m back. Great vacation. In fact, it could not have been better. Will write it up next week. I need to think carefully about what I write because it will be so completely opposite to what I (and you) have been “taught” for 50 years, and I don’t need (more) enemies.

    The WIR will be a challenge this weekend because I became totally engrossed this week with the Cuban experience, and I never once tried to keep track of the market; but, as you know, I need to review every aspect of capital markets in preparation for Monday morning, when we get back to work.

    Thanks to korvus, Patrick and Geoff for managing everything in my absence. I had total confidence they would.

    • Chickenpookie(118083 comments)-
      July 17, 2009 at 11:40 pm

      “Thanks to korvus, Patrick and Geoff for managing everything in my absence. I had total confidence they would.”

      These guys gave you quite a run for your money Bill, I thoroughly enjoyed it (your vacation)! he he he….

    • Craig(118083 comments)-
      July 18, 2009 at 1:09 am

      Glad you’re back Bill. I have a few friends that have been to Cuba (Mercan’s travelling through Mexico or Canada, don’t stamp the passport please….) and they came back with great stories and wonderful tales of adventure and unexpected happiness and prosperity in a *real* way. Sure they drive old cars and such but they live a REAL life based on real earnings, not one of debt and disconnection from reality. and I’m told it is truly a beautiful country.

      I’m looking forward to your stories….give us the full meal deal! We can handle the truth. Sure, some will say you’ve gone socialist or commie, but travel to other places widens our horizons and the truth will set us free.

      My friends talked about moving there, and for hard working Americans, that said a lot to me. Afterall, if our own government is ripping us off via our money supply, spending, borrowing, and falsified statistics, what on earth makes us believe all the other stuff they tell us? Kaimu reminds us of this constantly, and for good reason. I can’t wait! I hope you had a great time and you’re fully rested, you deserve it.

  69. 2nd_ave(118083 comments)-
    July 17, 2009 at 11:12 pm

    That was all we talked about here, right? 10000/2000. If someone had told you then that we would hit 6500/670, you would have placed buy limits immediately. No second thoughts.

    Well, at 6500/670, not too many people were outright buying. We wanted to wait for a clear reversal before buying, right?

    Now we have the reversal. So why the hesitation?

  70. 2nd_ave(118083 comments)-
    July 18, 2009 at 12:05 am

    For some reason, this column rings true.

    • Lori Smyth(118083 comments)-
      July 18, 2009 at 1:45 am

      “I see far too much pain among men and women in middle age or later in life who simply assumed something would happen to take care of them. It might, but then again, it might not. It makes good sense then to realize that for most of us, there is no one to take care of us but us, and that the best and strongest part of us is our younger self. Let that younger you give you an inheritance of safety and security”

      Some true pearls of wisdom in that article 2nd. Thanks for sharing it. I have passed it along to my 3 adult children and a few of their friends. A good message in there for all of us. I have heard the odd older person who lived a life of excess only to proclaim -” Geez, if I’d known I was going to live this long, I would have taken better care of myself”. No time like the present……….start where you aim to finish. Have a great weekend all… Welcome home Bill, hope you feel somewhat relaxed and refreshed.

    • Grym(118083 comments)-
      July 18, 2009 at 1:43 pm
      • Les(118083 comments)-
        July 18, 2009 at 3:41 pm

        Sorry Grym, Ben Stein is another talking head TV sellout IMO:

        • jock(118083 comments)-
          July 18, 2009 at 4:21 pm

          Ben Stein isn’t a sellout. He actually BELIEVES that stuff …

        • 2nd_ave(118083 comments)-
          July 18, 2009 at 4:52 pm

          How did we end up discussing Ben Stein? He made a good point, which is all I’m passing along. If we were to restrict our attention to messages from messengers we ‘like,’ we’d all be in trouble. The ones we ‘like’ are often wrong, and the ones we ‘dislike’ are often right.

          • Grym(118083 comments)-
            July 18, 2009 at 5:29 pm


            Sorry, I didn’t mean to contradict your recognition that we need to begin early in life to prepare for the future. It’s just that Ben always seems to me to be pushing simple solutions (OK for simple problems only.) as if they are profound.

            He’s old enough to either be wiser than he appears, or just playing the dope without the aid of a straight man.

            The present situation is at a point (my examples) where people who did just what he is saying are still getting hurt very badly. I see this as criminal and not something to passed off with simplistic formulas.

  71. 2nd_ave(118083 comments)-
    July 18, 2009 at 2:38 am

    The best way for a rocknroller to go out, which is to say don’t. Check out Mick’s drumming.

  72. Craig(118083 comments)-
    July 18, 2009 at 2:55 am

    It’s Friday night and some of us old geezers stay in and have a Black and Tan and listen to some tunes….

    Last week we had the pleasure of hearing Ry Cooder, well kids if you liked Ry buckle your seat belts, it gets better! Sit back and enjoy!
    From one of our local radio stations in Seattle…
    Let the good times roll!

    And if you listen to nothing else, listen to this….Ry Cooder and David Lindley together….very pretty.

  73. Craig(118083 comments)-
    July 18, 2009 at 3:07 am
  74. Craig(118083 comments)-
    July 18, 2009 at 3:10 am

    See? Don’t drink and post….

    • MarkW(118083 comments)-
      July 18, 2009 at 3:18 am

      2nd, Craig- Just in time. My seven year old (KB from now on) has been asking where the music videos are. Kinda a Friday thing we do while making dinner. Nice little pasta with chicken and pesto.

  75. Craig(118083 comments)-
    July 18, 2009 at 3:23 am

    Okay 2nd, just one more, listen to this.
    Nice pics of Winnipeg.
    Ends with one of the strangest song lyrics ever….

  76. MarkW(118083 comments)-
    July 18, 2009 at 3:32 am
  77. Craig(118083 comments)-
    July 18, 2009 at 3:52 am

    Here’s one you’ll love then…..block the screen at first if KB is too young for Woodstock type nudity. It passes quickly to the most incredible performance on drums, one of my favorites.

    • MarkW(118083 comments)-
      July 18, 2009 at 4:18 am

      Craig- Dancing in the Barry kitchen! I must have a rerto-girl, no lipstick and lace here! No blocks needed ….we (they) all know what boys and girls look like. Maybe we will get lucky and by the time they are adults that issue will have been settled.

      Nice video, we haven’t seen that one. THX.

  78. vanillabean(118083 comments)-
    July 18, 2009 at 4:27 am

    okay, I had to get in on the party!

    love that santana, I remember seeing clapton with santana back up. it was one of the best live performances I can remember.

    • MarkW(118083 comments)-
      July 18, 2009 at 4:49 am

      VB- Nice!! Man…guilt pleasures abound.

  79. Les(118083 comments)-
    July 18, 2009 at 6:48 am

    Someone was having a go at him the other day. Fair enough.

    He reflects on his history and the financial media:

  80. Les(118083 comments)-
    July 18, 2009 at 7:08 am
  81. Les(118083 comments)-
    July 18, 2009 at 8:27 am

    Commentary from an analyst:

    “If December corn holds $3.20 into next week we may look to re-establish longs. Wheat for months was a follower in agriculture it soon may become the leader and we should have some bullish suggestions next week in KCBOT or CBOT wheat. Coffee finished higher by 3 cents today, on trade above 120.00 125.00 should follow shortly after.”


  82. kaimu(118083 comments)-
    July 18, 2009 at 9:53 am


    Well, its the BIGGEST!!

    On July 16, Thursday … 2009 … the US Treasury spent $121BIL USD on Social Security benefits. That is the BIGGEST one day outlay I have seen.

    Just yesterday I mentioned that the combined total of Social Security, Medicare and Medicaid just went past $1TRIL USD, add another $124BIL more.

    Hummmmm ….

  83. Ron Sen(118083 comments)-
    July 18, 2009 at 10:44 am
  84. Lori Smyth(118083 comments)-
    July 18, 2009 at 11:24 am

    Who lies awake @ night dreaming these products up? makes one wonder…………………………….

  85. Les(118083 comments)-
    July 18, 2009 at 11:25 am
  86. Les(118083 comments)-
    July 18, 2009 at 11:29 am

    good to see someone airing this dirty laundry

  87. Les(118083 comments)-
    July 18, 2009 at 11:40 am

    “When it comes to the United States Natural Gas ETF (NYSE:UNG), I’m waiting to see if the share price might dip below $11 before I begin accumulating. In the long-run I’m hoping for a triple with UNG if we can buy the shares low enough. When the “blood is running in the streets” on NG and all the talking-heads are bad-mouthing it, that will be the time to buy.”

  88. johnuk(118083 comments)-
    July 18, 2009 at 12:29 pm

    An Article about Goldman Sachs in the UK press,Headlined:

    “As Goldman Sachs posts huge profits from the economic crisis, the question is: Did it cause the problems in the first place?”

    Good to see the story going mainstream.

    • Bill Cara(118083 comments)-
      July 18, 2009 at 1:14 pm

      From early in his tenure as US Treasury Secretary, I started calling the program “Paulson’s Folly”, but maybe we are now learning there was more intent than foolishness on the part of the ex-Goldman Sachs CEO and named head of HB&B (as I pointed out in an HB&B report over his signature).

      Many of us called Paulson a Trojan horse. Will we ever be told the truth of the deceit behind TARP? I certainly hope so.

      That record-breaking quarterly profit at GS was net of at least $5 billion in reserves for staff bonuses, mostly made at our expense. Will we ever find out how much tax is paid by GS staff and how much is secretly moved and hidden offshore?

      As somebody wrote me this week, when does the revolution begin?

    • barry(118083 comments)-
      July 18, 2009 at 1:29 pm

      More on the story going mainstream. The clip at the bottom is good. I did not see it posted here yet, so hope it is new.

      • Lori Smyth(118083 comments)-
        July 18, 2009 at 5:15 pm

        That article was positively nauseating, no wonder Bill aptly labels them HB&B – truly unreal and I’m glad the general public is finally waking up and being exposed to the excesses and crap that goes on behind the scenes in government and on Wall Street. I’m a CND but would be willing to support your revolution, let me know where and when it begins and I’ll be there to support your fight…….

        • ChrisM(118083 comments)-
          July 19, 2009 at 4:22 am


          July 16, 2009

          Goldman Sachs in Talks to Acquire Treasury Department

          Sister Entities to Share Employees, Money

          In what some on Wall Street are calling the biggest blockbuster deal in the history of the financial sector, Goldman Sachs confirmed today that it was in talks to acquire the U.S. Department of the Treasury.
          According to Goldman spokesperson Jonathan Hestron, the merger between Goldman and the Treasury Department is “a good fit” because “they’re in the business of printing money and so are we.”
          The Goldman spokesman said that the merger would create efficiencies for both entities: “We already have so many employees and so much money flowing back and forth, this would just streamline things.”
          Mr. Hestron said the only challenge facing Goldman in completing the merger “is trying to figure out which parts of the Treasury Dept. we don’t already own.”
          Goldman recently celebrated record earnings by roasting a suckling pig over a bonfire of hundred-dollar bills.
          Elsewhere, conspiracy theorists celebrated the 40th anniversary of NASA faking the moon landing.
          And in South Carolina, Gov. Mark Sanford gave his wife a new diamond ring, while his wife gave him an electronic ankle bracelet.

  89. bsi87(118083 comments)-
    July 18, 2009 at 12:44 pm

    DAG – Triple RSI buy

    EEV, REW, SSG, QID – accumulation zone

    FD: long DAG, SSG

  90. 2nd_ave(118083 comments)-
    July 18, 2009 at 1:17 pm

    55/75 expected here, and probably somewhat warmer where you are. Expect you’ll be spending the day outside with the kids.

    I’ll be pondering my change in (longer-term) sentiment from bear to bull, and whether to trade it or fade it.

    • MarkW(118083 comments)-
      July 18, 2009 at 6:01 pm

      2nd- The sun is out now and I suspect the neighbors to start filtering in later this afternoon for a swim. I have a pretty amazing variety of friends. Ages range from 23 to 73 that like to bring their kids over. Yep…73 and has a 12 year old daughter. So I suspect while your working on your trading strategy, I’ll be conducting my little informal “economic sentiment” evaluation.

      If most people show up, I’ll have here;
      1 Phd in economics
      1 Masters in science that just started his own line of skin care
      1 engineer working in micro inverters for solar pannels
      1 accountant
      2 school teachers
      1 line cook
      1 photographer who runs commercial shoots
      2 carpenters
      1 drywall hanger
      1 ER doctor
      And 1, 73 year old retired engineer that moved here from Sweden when he was 19.

      Polling results to follow….

      • 2nd_ave(118083 comments)-
        July 19, 2009 at 4:24 pm

        Mark- Another day just like yesterday.

        What it comes down to for me is:

        (a) I’ll be trading (long and short, as always) with an added bias to the long side as long as the indexes my positions are ‘tracking’ remain above their respective 200-day moving averages. It’s only a test, of course- I’m taking Siegel’s data as reported, but if they’re accurate, there appears to be an edge to leaning long/short based on that signal. I also expect business as usual as far as being played by the market, maybe with moves back below and then again above the 200 DMA.

        (b) I’m thinking about taking positions in the buy-and-hold, which you will recall were cashed out April 15. Leaning towards buying into some kind of pull-back.

        (c) I may add a few (medium-term) long positions in addition to day trading the ultras.

        (d) Will stick to intraday positions in the ultras.

        (e) From a sentiment perspective, it appears the crowd is still looking down. Although short-term, we almost have to pull back.

        (f) I like 1000. I like 1200 even more, although I probably won’t be around that long. Longer term, the mid-8000s/low 900s might form the bottoms of new trend channels? No clue, really.

        All the above is of course subject to abrupt change at any time and without any notice.

        Will be traveling around the Bay until after dinner. Let’s see how sentiment plays out in Asia.

        • MarkW(118083 comments)-
          July 19, 2009 at 5:00 pm

          2nd- Great day for it. Enjoy! I’ve got some unexpected work to do today but hope to finish by 2pm. Thanks for laying out your game plan. I’ve kinda been doing that with partial funds in my trifecta.

          Follow up to yesterdays “economic sentiment”… Most people seem comfortable for now with their businesses. No jumping jacks, except for the Swede of course! This group is pretty fiscally conservative, socially liberal. Most see through the banking fiasco for what it is. I was surprised, as all I did was listen…and cook a ton of chicken. Many are very concerned with the direction the health care package has taken. All are less than thrilled with Obama, and I’m sure he got ALL of their votes. Mine included.

          • 2nd_ave(118083 comments)-
            July 20, 2009 at 3:36 am

            Mark- We hit many spots in the North Bay, including a detour to my favorite Indian casino, where I tested my new-found faith in pressing trades until the party fades. I was the shooter at one point, with bets riding on almost every number + one of course for the dealers. It was going so well I even bet the ‘1-4’ and the ‘2-3’ on the next roll (the point was 5). Next roll came up ‘2-3’! I walked away with 256% of starting capital (156% return on value at risk) in 20 minutes.

            So what does any of this mean, if anything? Why are we able to fit so much of human behavior into recurring patterns/numbers? Why 5 waves? Why are 50% retracements important? Why the 50DMA/200DMA? We know the odds when rolling dice are fixed. I have to assume the odds of indexes hitting certain numbers are not. Yet one is generally able to press market bets just as one presses table bets. Still pondering this one.

          • 2nd_ave(118083 comments)-
            July 20, 2009 at 3:46 am

            Another way to put it is I would have to make the Don’t Come wager were they to push the dice to Tim Knight at this point. (Nothing personal, of course. I am entirely neutral on Knight as a trader, as I know as much [or as little] about him as I do about the strangers on either side of me at the table). I’m basing the bet right now entirely on his one week history. As soon as his luck changes, I would shift all bets to the Pass line.

          • MarkW(118083 comments)-
            July 20, 2009 at 4:08 am

            2nd- Like your first rendition better. Nice man! Reminds me of my last trip to South Lake. Feels to me like rotation is still on, but some money is sticking on the way out. I suspect this weeks earnings to be solid, due to cost cutting. Of course the real test will be next quarter for top line growth. From what I hear from my clients the point is 6/8.

            5/15 seems like ages ago. GL, shooter. See you at the open.

            TOF- Looks like SPNG has some real support @ .078.

  91. bsi87(118083 comments)-
    July 18, 2009 at 3:02 pm

    running SPX/IYT against IEF/$VIX shows RSI figures in the 70’s. Options expiration week naturally had to kill put values. running $compq:$spx shows a lower high. $compq:$spx is showing a lower high, meaning speculation on tech/small caps is pulling back.

    Everyone, I mean, EVERYONE saw the H&S pattern. No wonder it got blown up.

    McClellan Oscillator is making a lower high.

    Keep in mind I missed the March bottom. I didn’t run all the comparisons as I have above.

  92. jock(118083 comments)-
    July 18, 2009 at 4:17 pm
  93. mntinhi(118083 comments)-
    July 18, 2009 at 4:20 pm

    I think that unemployment is getting real serious. This video shows the results of the governments stimulus plan inorder to save jobs and lessen unemployment. It is about a minute, and well worth the look.

    • wpepper(118083 comments)-
      July 18, 2009 at 5:12 pm

      From one of the comments on the youtube unemployment vid

      “…The White House Economic Advisor has declared their stimulus a success because “fewer people are searching ‘economic disaster’ on Google.” Pure genius!”

      I got 85,700,000 hits. Perhaps we should keep track of this going forward 😉

    • Grym(118083 comments)-
      July 18, 2009 at 5:39 pm
    • kaimu(118083 comments)-
      July 18, 2009 at 5:47 pm

      ALOHA !!

      Yes, that is a good video and is a good one that should be shown in public schools since it is so “visual” and is demonstrated in coinage we can all relate to these days, which is “pennies”! Not for our thoughts but for our votes!

      Clearly, the WITHHOLDING REVENUE TAX charts show that the jobs markets have collapsed. Even Harley Davidson is laying off another 1,000 workers now …

      The worst part about this mess is that while Obama was making his Stimulus announcement of 4milllion jobs saved the US WITHHOLDING TAX REVENUE charts showed, as I have posted, that the jobs fell off a cliff back in Q4 2008. Typical Obama, or any politician, $100BIL short and a decade late!

      In short this administration is even worse than the BUSH & CHENEY regime, because Obama, just like BUSH, has no clue what he is doing and he surrounds himself with elite cronies left over from the Clinton years and with their amazing economic brilliance the US Treasury under Obama is making Bush look like a pauper at spending.

      The DEMS and REPS have clearly made it known neither of them will ever give up their power voluntarily. In fact they actually believe that WE need them more than they need US! They believe we owe them our allegiance just because they are in power. That kind of “thinking” as they say in AA is “stinkin'” … “Stinkin’ Thinkin'” … That kind of thinking is the complete opposite of what the US Constitution and the Declaration of Independence dictates.

      WE THE PEOPLE have without a doubt suffered, as the US Declaration of Independence says, “a long train of abuses”.

      These abuses can be directly correlated to our monetary system and the fraud that is the US FED. If you want to start at the top in terms of eliminating the fraud and evil that resides here in America then you MUST start with the US FED.

      RON PAUL is attempting to do that with his AUDIT THE FED Bill … RON PAUL has been fighting the US FED his entire political life. He was the only politician in DC who was going up against Greenspan and the HB&B derivatives. RON PAUL lost that battle to regulate derivatives mainly because the rest of the US Congress and WE THE PEOPLE could have cared less at the time. Now look, even Geithner is talking about regulating derivatives! Where were these people 6-7 years ago?

      Back then prior to this meltdown I was doing what HB&B feared most, which was pulling all of my deposits and investments our of the major US Banks, like Bank Of America and the investment banks like Morgan Stanley and Merrill Lynch. That is one way you, as investors, can “vote with your feet”. I did!

      If you are going to ask me what non US Bank I moved my funds to back in 2002 and thereafter, that bank is the “BANK OF GOLD”! The safest bank in the World and the only bank that has never been “stress tested”! Oh, and I dumped stocks and bonds, paid off my debt and bought a food producing farm in Hawaii instead. My point is that many of the best investments in the World have nothing to do with banks or the stock market!

      CHINA understands that concept now … Don’t feed the US banks feed yourselves!

      IT IS WHAT IT IS …

  94. shark_attack(118083 comments)-
    July 18, 2009 at 5:30 pm

    His pop worked for Nixon.

    As for the strength of his point, Let’s put it this way…

    The younger self taking care of the older self…..Sounds nice. It’s eloquent and circular, and is perfectly in keeping with our economic creed. It also sounds a lot like the groundwork for an argument which can be erroneously inferred….

    That argument is, namely, Don’t make MY older self pay for YOUR older self……essentially a right wing position. Stein cleverly couches the notion in an appealing sounding ideal, but alas, an impossible one. Why impossible?

    The problem with the ideal is, most people’s younger selves aren’t born rich and connected, aren’t hollywood actors and game show hosts.

    The problem is, most younger people don’t even HAVE a freaking job, Benny. Those who do toil in the service sector making BUTKUS per hour and have NO WAY TO SAVE, Benny. No way to save.

    Most people are getting SCREWED by government into paying higher taxes on everything, Benny, to pay for the excesses of YOUR president’s, Bush, Bush, Reagan and Nixon, the most profligate of tax and spenders, Benny, AND FOR THE EXCESSES OF THE REST OF YOUR ENTIRE FREAKING GENERATION. BENNY.

    Best thing you could do pal is to die and pay inheritance tax. Benny.

  95. mbernold(118083 comments)-
    July 18, 2009 at 5:49 pm

    Dismantling the Temple
    By William Greider
    This article appeared in the August 3, 2009 edition of The Nation.

    July 15, 2009
    The financial crisis has propelled the Federal Reserve into an excruciating political dilemma. The Fed is at the zenith of its influence, using its extraordinary powers to rescue the economy. Yet the extreme irregularity of its behavior is producing a legitimacy crisis for the central bank. The remote technocrats at the Fed who decide money and credit policy for the nation are deliberately opaque and little understood by most Americans. For the first time in generations, they are now threatened with popular rebellion

    During the past year, the Fed has flooded the streets with money–distributing trillions of dollars to banks, financial markets and commercial interests–in an attempt to revive the credit system and get the economy growing again. As a result, the awesome authority of this cloistered institution is visible to many ordinary Americans for the first time. People and politicians are shocked and confused, and also angered, by what they see. They are beginning to ask some hard questions for which Federal Reserve governors do not have satisfactory answers.
    Where did the central bank get all the money it is handing out? Basically, the Fed printed it, out of thin air. That is what central banks do. Who told the Fed governors they could do this? Nobody, really–not Congress or the president. The Federal Reserve Board, alone among government agencies, does not submit its budgets to Congress for authorization and appropriation. It raises its own money, sets its own priorities.

    Representative Wright Patman, the Texas populist who was a scourge of central bankers, once described the Federal Reserve as “a pretty queer duck.” Congress created the Fed in 1913 with the presumption that it would be “independent” from the rest of government, aloof from regular politics and deliberately shielded from the hot breath of voters or the grasping appetites of private interests–with one powerful exception: the bankers.

    The Fed was designed as a unique hybrid in which government would share its powers with the private banking industry. Bankers collaborate closely on Fed policy. Banks are the “shareholders” who ostensibly own the twelve regional Federal Reserve banks. Bankers sit on the boards of directors, proposing interest-rate changes for Fed governors in Washington to decide. Bankers also have a special advisory council that meets privately with governors to critique monetary policy and management of the economy. Sometimes, the Fed pretends to be a private organization. Other times, it admits to being part of the government.

    The antiquated quality of this institution is reflected in the map of the Fed’s twelve regional banks. Five of them are located in the Midwest (better known today as the industrial Rust Belt). Missouri has two Federal Reserve banks (St. Louis and Kansas City), while the entire West Coast has only one (located in San Francisco, not Los Angeles or Seattle). Virginia has one; Florida does not. Among its functions, the Federal Reserve directly regulates the largest banks, but it also looks out for their well-being–providing regular liquidity loans for those caught short and bailing out endangered banks it deems “too big to fail.” Critics look askance at these peculiar arrangements and see “conspiracy.” But it’s not really secret. This duck was created by an act of Congress. The Fed’s favoritism toward bankers is embedded in its DNA.

    This awkward reality explains the dilemma facing the Fed. It cannot stand too much visibility, nor can it easily explain or justify its peculiar status. The Federal Reserve is the black hole of our democracy–the crucial contradiction that keeps the people and their representatives from having any voice in these most important public policies. That’s why the central bankers have always operated in secrecy, avoiding public controversy and inevitable accusations of special deal-making. The current crisis has blown the central bank’s cover. Many in Congress are alarmed, demanding greater transparency. More than 250 House members are seeking an independent audit of Fed accounts. House Speaker Nancy Pelosi observed that the Fed seems to be poaching on Congressional functions–handing out public money without the bother of public decision-making.

    “Many of us were…if not surprised, taken aback, when the Fed had $80 billion to invest in AIG just out of the blue,” Pelosi said. “All of a sudden, we wake up one morning and AIG was receiving $80 billion from the Fed. So of course we’re saying, Where is this money coming from? ‘Oh, we have it. And not only that, we have more.'” So who needs Congress? Pelosi sounded guileless, but she knows very well where the Fed gets its money. She was slyly tweaking the central bankers on their vulnerability.

    Fed chair Ben Bernanke responded with the usual aloofness. An audit, he insisted, would amount to “a takeover of monetary policy by the Congress.” He did not appear to recognize how arrogant that sounded. Congress created the Fed, but it must not look too deeply into the Fed’s private business. The mystique intimidates many politicians. The Fed’s power depends crucially upon the people not knowing exactly what it does.

    Basically, what the central bank is trying to do with its aggressive distribution of trillions is avoid repeating the great mistake the Fed made after the 1929 stock market crash. The central bankers responded hesitantly then and allowed the money supply to collapse, which led to the ultimate catastrophe of full-blown monetary deflation and created the Great Depression. Bernanke has not yet won this struggle against falling prices and production–deflationary symptoms remain visible around the world–but he has not lost either. He might get more public sympathy if Fed officials explained this dilemma in plain English. Instead, they are shielding people from understanding the full dimensions of our predicament.

    President Obama inadvertently made the political problem worse for the Fed in June, when he proposed to make the central bank the supercop to guard against “systemic risk” and decide the terms for regulating the largest commercial banks and some heavyweight industrial corporations engaged in finance. The House Financial Services Committee intends to draft the legislation quickly, but many members want to learn more first. Obama’s proposal gives the central bank even greater power, including broad power to pick winners and losers in the private economy and behind closed doors. Yet Obama did not propose any changes in the Fed’s privileged status. Instead, he asked Fed governors to consider the matter. But perhaps it is the Federal Reserve that needs to be reformed.

    A few months back, I ran into a retired Fed official who had been a good source twenty years ago when I was writing my book about the central bank, Secrets of the Temple: How the Federal Reserve Runs the Country. He is a Fed loyalist and did not leak damaging secrets. But he helped me understand how the supposedly nonpolitical Fed does its politics, behind the veil of disinterested expertise. When we met recently, he said the central bank is already making preparations to celebrate its approaching centennial. Some of us, I responded, have a different idea for 2013.

    “We think that would be a good time to dismantle the temple,” I playfully told my old friend. “Democratize the Fed. Or tear it down. Create something new in its place that’s accountable to the public.”

    The Fed man did not react well to my teasing. He got a stricken look. His voice tightened. Please, he pleaded, do not go down that road. The Fed has made mistakes, he agreed, but the country needs its central bank. His nervous reaction told me this venerable institution is feeling insecure about its future.

    Six reasons why granting the Fed even more power is a really bad idea:

    1.?It would reward failure. Like the largest banks that have been bailed out, the Fed was a co-author of the destruction. During the past twenty-five years, it failed to protect the country against reckless banking and finance adventures. It also failed in its most basic function–moderating the expansion of credit to keep it in balance with economic growth. The Fed instead allowed, even encouraged, the explosion of debt and inflation of financial assets that have now collapsed. The central bank was derelict in enforcing regulations and led cheers for dismantling them. Above all, the Fed did not see this disaster coming, or so it claims. It certainly did nothing to warn people.

    2.?Cumulatively, Fed policy was a central force in destabilizing the US economy. Its extreme swings in monetary policy, combined with utter disregard for timely regulatory enforcement, steadily shifted economic rewards away from the real economy of production, work and wages and toward the financial realm, where profits and incomes were wildly inflated by false valuations. Abandoning its role as neutral arbitrator, the Fed tilted in favor of capital over labor. The institution was remolded to conform with the right-wing market doctrine of chairman Alan Greenspan, and it was blinded to reality by his ideology (see my Nation article “The One-Eyed Chairman,” September 19, 2005).

    3.?The Fed cannot possibly examine “systemic risk” objectively because it helped to create the very structural flaws that led to breakdown. The Fed served as midwife to Citigroup, the failed conglomerate now on government life support. Greenspan unilaterally authorized this new financial/banking combine in the 1990s–even before Congress had repealed the Glass-Steagall Act, which prohibited such mergers. Now the Fed keeps Citigroup alive with a $300 billion loan guarantee. The central bank, in other words, is deeply invested in protecting the banking behemoths that it promoted, if only to cover its own mistakes.

    4.?The Fed can’t be trusted to defend the public in its private deal-making with bank executives. The numerous revelations of collusion have shocked the public, and more scandals are certain if Congress conducts a thorough investigation. When Treasury Secretary Timothy Geithner was president of the New York Fed, he supervised the demise of Bear Stearns with a sweet deal for JPMorgan Chase, which took over the failed brokerage–$30 billion to cover any losses. Geithner was negotiating with Morgan Chase CEO and New York Fed board member Jamie Dimon. Goldman Sachs CEO Lloyd Blankfein got similar solicitude when the Fed bailed out insurance giant AIG, a Goldman counterparty: a side-door payout of $13 billion. The new president at the New York Fed, William Dudley, is another Goldman man.

    5.?Instead of disowning the notorious policy of “too big to fail,” the Fed will be bound to embrace the doctrine more explicitly as “systemic risk” regulator. A new superclass of forty or fifty financial giants will emerge as the born-again “money trust” that citizens railed against 100 years ago. But this time, it will be armed with a permanent line of credit from Washington. The Fed, having restored and consolidated the battered Wall Street club, will doubtless also shield a few of the largest industrial-financial corporations, like General Electric (whose CEO also sits on the New York Fed board). Whatever officials may claim, financial-market investors will understand that these mammoth institutions are insured against failure. Everyone else gets to experience capitalism in the raw.

    6.?This road leads to the corporate state–a fusion of private and public power, a privileged club that dominates everything else from the top down. This will likely foster even greater concentration of financial power, since any large company left out of the protected class will want to join by growing larger and acquiring the banking elements needed to qualify. Most enterprises in banking and commerce will compete with the big boys at greater disadvantage, vulnerable to predatory power plays the Fed has implicitly blessed.

    Whatever good intentions the central bank enunciates, it will be deeply conflicted in its actions, always pulled in opposite directions. If the Fed tries to curb the growth of the megabanks or prohibit their reckless practices, it will be accused of damaging profitability and thus threatening the stability of the system. If it allows overconfident bankers to wander again into dangerous territory, it will be blamed for creating the mess and stuck with cleaning it up. Obama’s reform might prevail in the short run. The biggest banks, after all, will be lobbying alongside him in favor of the Fed, and Congress may not have the backbone to resist. The Fed, however, is sure to remain in the cross hairs. Too many different interests will be damaged–thousands of smaller banks, all the companies left out of the club, organized labor, consumers and other sectors, not to mention libertarian conservatives like Texas Representative Ron Paul. They will recognize that the “money trust” once again has its boot on their neck, and that this time the government arranged it.

    The obstacles to democratizing the Fed are obviously formidable. Tampering with the temple is politically taboo. But this crisis has demonstrated that the present arrangement no longer works for the public interest. The society of 1913 no longer exists, nor does the New Deal economic order that carried us to twentieth-century prosperity. The country thus has a rare opportunity to reconstitute the Federal Reserve as a normal government agency, shorn of the bankers’ preferential trappings and the fallacious claim to “independent” status as well as the claustrophobic demand for secrecy.

    Progressives in the early twentieth century, drawn from the growing ranks of managerial professionals, believed “good government” required technocratic experts who would be shielded from the unruly populace and especially from radical voices of organized labor, populism, socialism and other upstart movements. The pretensions of “scientific” decision-making by remote governing elites–both the mysterious wisdom of central bankers and the inventive wizardry of financial titans–failed spectacularly in our current catastrophe. The Fed was never independent in any real sense. Its power depended on taking care of its one true constituency in banking and finance.

    A reconstituted central bank might keep the famous name and presidentially appointed governors, confirmed by Congress, but it would forfeit the mystique and submit to the usual standards of transparency and public scrutiny. The institution would be directed to concentrate on the Fed’s one great purpose–making monetary policy and controlling credit expansion to produce balanced economic growth and stable money. Most regulatory functions would be located elsewhere, in a new enforcement agency that would oversee regulated commercial banks as well as the “shadow banking” of hedge funds, private equity firms and others.

    The Fed would thus be relieved of its conflicted objectives. Bank examiners would be free of the insider pressures that inevitably emanate from the Fed’s cozy relations with major banks. All of the private-public ambiguities concocted in 1913 would be swept away, including bank ownership of the twelve Federal Reserve banks, which could be reorganized as branch offices with a focus on regional economies.

    Altering the central bank would also give Congress an opening to reclaim its primacy in this most important matter. That sounds farfetched to modern sensibilities, and traditionalists will scream that it is a recipe for inflationary disaster. But this is what the Constitution prescribes: “The Congress shall have the power to coin money [and] regulate the value thereof.” It does not grant the president or the treasury secretary this power. Nor does it envision a secretive central bank that interacts murkily with the executive branch.

    Given Congress’s weakened condition and its weak grasp of the complexities of monetary policy, these changes cannot take place overnight. But the gradual realignment of power can start with Congress and an internal reorganization aimed at building its expertise and educating members on how to develop a critical perspective. Congress has already created models for how to do this. The Congressional Budget Office is a respected authority on fiscal policy, reliably nonpartisan. Congress needs to create something similar for monetary policy.

    Instead of consigning monetary policy to backwater subcommittees, each chamber should create a major new committee to supervise money and credit, limited in size to members willing to concentrate on becoming responsible stewards for the long run. The monetary committees, working in tandem with the Fed’s board of governors, would occasionally recommend (and sometimes command) new policy directions at the federal agency and also review its spending.

    Setting monetary policy is a very different process from enacting laws. The Fed operates through a continuum of decisions and rolling adjustments spread over months, even years. Congress would have to learn how to respond to deeper economic conditions that may not become clear until after the next election. The education could help the institution mature.

    Congress also needs a “council of public elders”–a rotating board of outside advisers drawn from diverse interests and empowered to speak their minds in public. They could second-guess the makers of monetary policy but also Congress. These might include retired pols, labor leaders, academics and state governors–preferably people whose thinking is no longer defined by party politics or personal ambitions. The public could nominate representatives too. No financial wizards need apply.

    A revived Congress armed with this kind of experience would be better equipped to enact substantive law rather than simply turning problems over to regulatory agencies with hollow laws that are merely hortatory suggestions. Reordering the financial system and the economy will require hard rules–classic laws of “Thou shalt” and “Thou shalt not” that command different behavior from certain private interests and prohibit what has proved reckless and destructive. If “too big to fail” is the problem, don’t leave it to private negotiations between banks and the Federal Reserve. Restore anti-monopoly laws and make big banks get smaller. If the financial system’s risky innovations are too complicated for bank examiners to understand, then those innovations should probably be illegal.

    Many in Congress will be afraid to take on the temple and reluctant to violate the taboo surrounding the Fed. It will probably require popular rebellion to make this happen, and that requires citizens who see through the temple’s secrets. But the present crisis has not only exposed the Fed’s worst failures and structural flaws; it has also introduced citizens to the vast potential of monetary policy to serve the common good. If Ben Bernanke can create trillions of dollars at will and spread them around the financial system, could government do the same thing to finance important public projects the people want and need? Daring as it sounds, the answer is, Yes, we can.

    The central bank’s most mysterious power–to create money with a few computer keystrokes–is dauntingly complicated, and the mechanics are not widely understood. But the essential thing to understand is that this power relies on democratic consent–the people’s trust, their willingness to accept the currency and use it in exchange. This is not entirely voluntary, since the government also requires people to pay their taxes in dollars, not euros or yen. But citizens conferred the power on government through their elected representatives. Newly created money is often called the “pure credit” of the nation. In principle, it exists for the benefit of all.

    In this emergency, Bernanke essentially used the Fed’s money-creation power in a way that resembles the “greenbacks” Abraham Lincoln printed to fight the Civil War. Lincoln was faced with rising costs and shrinking revenues (because the Confederate states had left the Union). The president authorized issuance of a novel national currency–the “greenback”–that had no backing in gold reserves and therefore outraged orthodox thinking. But the greenbacks worked. The expanded money supply helped pay for war mobilization and kept the economy booming. In a sense, Lincoln won the war by relying on the “full faith and credit” of the people, much as Bernanke is printing money freely to fight off financial collapse and deflation.

    If Congress chooses to take charge of its constitutional duty, it could similarly use greenback currency created by the Federal Reserve as a legitimate channel for financing important public projects–like sorely needed improvements to the nation’s infrastructure. Obviously, this has to be done carefully and responsibly, limited to normal expansion of the money supply and used only for projects that truly benefit the entire nation (lest it lead to inflation). But here is an example of how it would work.

    President Obama has announced the goal of building a high-speed rail system. Ours is the only advanced industrial society that doesn’t have one (ride the modern trains in France or Japan to see what our society is missing). Trouble is, Obama has only budgeted a pittance ($8 billion) for this project. Spain, by comparison, has committed more than $100 billion to its fifteen-year railroad-building project. Given the vast shortcomings in US infrastructure, the country will never catch up with the backlog through the regular financing of taxing and borrowing.

    Instead, Congress should create a stand-alone development fund for long-term capital investment projects (this would require the long-sought reform of the federal budget, which makes no distinction between current operating spending and long-term investment). The Fed would continue to create money only as needed by the economy; but instead of injecting this money into the banking system, a portion of it would go directly to the capital investment fund, earmarked by Congress for specific projects of great urgency. The idea of direct financing for infrastructure has been proposed periodically for many years by groups from right and left. Transportation Secretary Ray LaHood co-sponsored legislation along these lines a decade ago when he was a Republican Congressman from Illinois.

    This approach speaks to the contradiction House Speaker Pelosi pointed out when she asked why the Fed has limitless money to spend however it sees fit. Instead of borrowing the money to pay for the new rail system, the government financing would draw on the public’s money-creation process–just as Lincoln did and Bernanke is now doing.

    The bankers would howl, for good reason. They profit enormously from the present system and share in the money-creation process. When the Fed injects more reserves into the banking system, it automatically multiplies the banks’ capacity to create money by increasing their lending (and banks, in turn, collect interest on their new loans). The direct-financing approach would not halt the banking industry’s role in allocating new credit, since the newly created money would still wind up in the banks as deposits. But the government would now decide how to allocate new credit to preferred public projects rather than let private banks make all the decisions for us.

    The reform of monetary policy, in other words, has promising possibilities for revitalizing democracy. Congress is a human institution and therefore fallible. Mistakes will be made, for sure. But we might ask ourselves, If Congress were empowered to manage monetary policy, could it do any worse than those experts who brought us to ruin?

    About William Greider
    National affairs correspondent William Greider has been a political journalist for more than thirty-five years. A former Rolling Stone and Washington Post editor, he is the author of the national bestsellers One World, Ready or Not, Secrets of the Temple, Who Will Tell The People, The Soul of Capitalism (Simon & Schuster) and, most recently, Come Home, America. more…

    • Lori Smyth(118083 comments)-
      July 18, 2009 at 6:13 pm

      Excellent read, the truth is emerging and that my friends is indeed a good thing going forward should the “change” Obama campaigned on ever be implemented……only time will tell

    • Grym(118083 comments)-
      July 19, 2009 at 12:37 pm

      Anyone who thinks globalization and the sacrificing of US jobs is benefiting the the average foreign worker should read Greider’s, “Who will tell the People?”

      Totally disgusting exploitation by US managers like J.T. Battenberg III of Delphi who refused to help the Mexican village provide water or sewage management for the workers who flocked there to get jobs. He told the mayor that if he pressed for aid Delphi would simply walk away to China.

      Battenberg had earned $6,745,000 per year. (WSJ “Executive Pay” April 14, 2003, pg R7)

      • 2nd_ave(118083 comments)-
        July 19, 2009 at 3:25 pm

        Grym- Obviously not a proponent of “Employees are our most valuable asset.” That’s OK. He’s obviously not in the practice of preparing for life after death either. (There are laws of physics we cannot circumvent while in this world. And there are laws of metaphysics that cannot circumvented.)

        • Grym(118083 comments)-
          July 19, 2009 at 4:26 pm


          LOL (with a sniff and a smirk)

          I did my first corp annual report design in 1963 and my last in 2003. I did a total number of approx. 75 to 100. My guess is the companies chose something like that employee appreciation line about one out of four years.

          It was interesting to look at employee graffiti on shop bulletin boards post-offshoring start in early 1990s.

          One HR morale booster campaign poster,”YES WE CAN!” was followed closely by another, “REACH NEW HORIZONS!”

          Employee comments added to the posters: “Don’t Worry, Be Happy!” “What me worry?” (With an Alfred E. Newman sketch) “My job is heading to new horizons and so is yours!”

          Management was oblivious.

  96. jmorris1950(118083 comments)-
    July 18, 2009 at 5:53 pm
  97. kaimu(118083 comments)-
    July 18, 2009 at 9:03 pm

    ALOHA !!


    We have had a bumper crop of orchids this year and I would like to offer an opportunity for the CARA COMMUNITY to share their good fortune with others who are less fortunate … File this under: “There but the Grace of God …”

    So if you know of someone in your life who is, as Orwell put it, “down and out” either with illness or with financial ruin then let me know.

    – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

    Here is my biz email in Hawaii at our nursery:

    Send me an email with the following information:

    SENDER: Your name and address and telephone
    RECIPIENT: Name and address and telephone number plus “gift message”

    Please limit the gift message to twenty words or less …

    Also mention a small bit about why this person would need this gift.
    – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
    I will keep this going until I run out of flowers!!!

    Sorry Canadians and Aussies and others outside the USA I cannot offer this to you guys since your government with “duty and GST” makes the shipping cost triple what it costs here in the USA. NO DELIVERIES OUTSIDE USA! But if you know a needy person within the USA borders then you qualify!



    No shipping no nothing … ZERO!!! I will even pick up the shipping tab!

    This is normally a $45USD cut orchid bouquet with Hawaiian foliage.

    Why am I doing this? Yesterday my wife and I were out in the greenhouse cutting flowers and just throwing them away. These are the most exotic and gorgeous flowers on Earth and they do not deserve to be unseen and end up as pig food when they could bring some much needed “sunshine” to some very deserving needy person or family.

    We already give free flowers to our neighbors and community here …

    Times are tough and they are getting tougher and it is time to become a RESILIENT COMMUNITY and stand as ONE! Time to put aside “profit” and “ego” and all the other trappings of HUBRIS! Time to step up to the plate and bring some Love and Joy to the World. There is enough misery for eternity.

    This is my OHANA’S(family) part … in a peaceful and love filled manner!



    MAHALO …

  98. Illini(118083 comments)-
    July 19, 2009 at 12:17 am the symbol for the ETF Vanguard FTSE All-World ex-US. It has substantially outperformed SPY since the lows of early March. Heavily into European multinationals with some others. Anyone have a comment? My comment: I wish I had some.

    • Chickenpookie(118083 comments)-
      July 19, 2009 at 1:16 am

      Some PFF in early March would’ve been a nice trade as well.

      • Illini(118083 comments)-
        July 19, 2009 at 1:50 am

        Yes. Been following PFF since becoming aware thru post on this blog. Probably outperformed many indexes when dividends are included. A note about PFF: The riskier financial preferred securities have been downgraded in the index due to,
        you know, troubles. PFF maybe a more pure play on industrial preferreds now.

        Edit: Maybe I should take that last one back. They are still very heavy in financials:

        Industry Diversification–As of 5/31/2009, 82% Financials.

        Perhaps these are low cost preferreds.

  99. Mackinaw(118083 comments)-
    July 19, 2009 at 1:20 am

    I’m going to miss her on Squeezeplay. Her last day: (usual witty opening banter with Kev O’Leary) (Bearish Call from David Fleck) (The Pack – minus the Clearwater guy) (boring) (good one – Cab Sauvignon to S&P Earnings) (career best moments)

  100. 2nd_ave(118083 comments)-
    July 19, 2009 at 1:23 am

    shark- You should see Two Lovers. No, not referring in any way to finding the right one. Just think you’ll enjoy the subtle acting and the East Coast personalities.

    David- Frequency mixes time travel, alternate realities, a father/son relationship (Dennis Quaid/Jim Caviezel), and a serial killer. Sounds weird, but a very well-written thriller- I watched it twice when it came out in ’99 or 2000. Just happened to see the DVD on display this weekend.

  101. NYUGrad(118083 comments)-
    July 19, 2009 at 3:19 am

    more specifically their indicators. I personally am trying to see the merits of both directons.

    • Lori Smyth(118083 comments)-
      July 19, 2009 at 3:25 pm

      The take away from this Stockcharts blog was aptly stated by Carl Swenlin:

      “Using flag pole as a measuring stick, I estimate a possible upside price target of 1200. Assuming that price is in the ball park, our long-term model, which is still bearish, will be switching to bullish very soon. Until then, I will still assume that the long-term is bearish, but I thought it worthwhile to point out that we are nearing a tipping point.

      Bottom Line: The violation of the head and shoulders neckline has proven to be a bear trap, and my opinion is that the rally from the March lows is resuming. My upside price target is about 1200 on the S&P 500. I have to say that this doesn’t make any sense considering what I think I know about the economy, which is why I try to ignore fundamentals in favor of the charts.”

      IMHO talking heads lie, the charts don’t, follow the charts not the pompous windbags on CNBC or BNN

      • 2nd_ave(118083 comments)-
        July 19, 2009 at 3:48 pm

        The ‘wall of worry’ favors continued upside for now. It almost sounds as if no one wants the markets to go up. That’s kind of strange in itself. That tells me traders (at least, the ones that write columns) are positioned short (or waiting to buy), and are trying to convince themselves it will go back down. We all know hope is not the kind of sentiment you want on your side. Maybe that’s what we all spotted when teamonfuego posted his longside bet- it was a bet against a widely hoped-for slide to 7500.

  102. loannetter(118083 comments)-
    July 19, 2009 at 3:33 am

    I came into work today to pick up the threads of a mortgage application stack needing tending for yet another young couple struggling to find a home within their means. These days ‘within your means’ has a much different tenor than it did a mere two years ago. It’s funny, the harder files are the ones I work my guts out for…to help them understand their commitment to the debt they are about to saddle themselves with. I had a rather wealthy trust beneficiary couple come in last month and I frankly just couldn’t get that excited by their attitude. The wanted me to want it I think. So today, I began to muse as I do when the phone isn’t ringing and decided that its about damn time somebody took at stand for WITHIN YOUR MEANS WRIT LARGE. Looking over from one loan modification stack next to the loan application stack –to adopt a household budget I was using with first timers to all applicants. I mean, if you don’t know what you are spending on groceries every month then how can you possilby know what you can afford in a mortgage payment plus taxes plus insurance plus maintenance, plus plus? Maybe we can start a sane debt movement. But as Kaimu might say “The only good debt is a dead debt!”

    • MarkW(118083 comments)-
      July 19, 2009 at 4:24 am

      lnetter- Perhaps you are in a unique position to actually make a difference. It can’t be that long ago that 20% down and a good credit report and solid work history were standard fare for home loans. I’m 46 and have owned my home for 9 years. At that time I had to save for 5 years for the down payment..and we could only afford a “fixer-upper”. I’m talking holes in the roof, no appliances, broken windows, etc. But that was cool. I knew that I wanted a conforming loan and the interest rate that came along with it.

      Fast forward 9 years, 3 kids latter, and the house is still not finished. But that’s OK too. Nothing “new” or “innovative” needs to take place. Just stick to what has worked for 70 years.

      Mortgage applicants for years have “counted” on lenders to make the “call”. We *&%$#!! up and are now paying the price. Another failed “social” experiment.

  103. Les(118083 comments)-
    July 19, 2009 at 10:46 am

    this last week. What’s the angle? Did news media suddenly grow a pair? pfff not likely. Who’s pulled a knife, and why?

    The last link with the Fox News vid. That’s Murdoch’s baby. What does he want? Does he have investments in competitors of Goldman’s? Having a go at Obama?

    questions, questions.

    • davefairtex(118083 comments)-
      July 19, 2009 at 10:55 am

      HB&B is not a monolith? Jealousy? Perhaps BAC and WFC want to take their biggest competitor down a notch? Instead of making this about “banking reform” they personalize the issues and say only Goldman is behaving badly, and if you just fix them, the problems will go away?

    • barry(118083 comments)-
      July 19, 2009 at 8:30 pm

      I think the scramble now to report on Goldman Sachs reflects catch up, like everyone suddenly jumping on the Monica Lewinsky story with Clinton after it broke. It must be “challenging” to ones journalistic credibility to be scooped by the Rolling Stones!

  104. 123(118083 comments)-
    July 19, 2009 at 11:37 am
  105. Ron Sen(118083 comments)-
    July 19, 2009 at 12:00 pm
  106. golfer(118083 comments)-
    July 19, 2009 at 12:29 pm


    Just finished reading the Daily Report for Saturday, Jul 18, 2009.
    While I thank the “fill-ins” of the past week I could not help but recall the words of Carly Simon… “NOBODY DOES IT BETTER.”

    Good to hear you had a good time in Cuba.

  107. 123(118083 comments)-
    July 19, 2009 at 12:42 pm

    Ran across this in today’s NYTimes.

  108. 2nd_ave(118083 comments)-
    July 19, 2009 at 3:38 pm

    Craig- Maybe you should check out the Kobe at Seattle’s Metro Market @ $15/lb? I’ve never seen Kobe at those prices.

  109. Les(118083 comments)-
    July 19, 2009 at 3:41 pm
  110. 2nd_ave(118083 comments)-
    July 19, 2009 at 3:58 pm

    “Here’s what I’ve got to say about the very big picture:

    “I accept the possibility – I emphasize, possibility – that we could be in a bottoming process, and the big, nasty plunge we’ve been talking about might never materialize. I set aside my preference for bear markets in saying this, because my preference doesn’t mean squat.
    I also accept the possibility that the countertrend rally continues much farther, as high as my oft-cited target of 1150, before the market falls to pieces again.
    Finally, I accept the possibility (and, again, my unimportant preference shouldn’t enter into the picture here) that we start descending from here before stabilizing at about 750 or so before resuming the uptrend. That would agree with the parallel I’ve made between the two tinted areas.
    The reason this week was so bad for me wasn’t because I ignored my rules – – with the exception of TBT, I followed by rules religiously. It was because I put a lot of trust in the H&S pattern and was heavily loaded on the short side. I have “backed off” quite a bit (largely by being stopped out of dozens of positions!) and am taking a wait-and-see approach to next week.

    “I remain, at the moment, still entirely short, although not as heavily as a week ago. If things do soften up, I will press the hardest on gold and energy shorts.

    “This is a tough market to trade, and it has been for much of the year. I find a lot of guidance and “anchoring” from sharing my experiences here. Thanks for being a part of it.”

    (I took the liberty of correcting a few of his typos.)

    • Grym(118083 comments)-
      July 19, 2009 at 4:42 pm

      IMO expecting any meaningful bottom (long term, that is) with the dismal jobs picture is based purely on “hope” and an attempt to ignore reality and the lack of responsible policies.

      Perhaps any thought of a “nasty plunge” are simply people hoping for some recognition of reality to present itself.

      We need policies implemented which face up to the economic facts of life.

      Instead of bumper stickers which say, “Pay to end abortion,” how about, “Pray to end conception,” … better still, “Pray for more responsible behavior”.

    • Les(118083 comments)-
      July 19, 2009 at 7:08 pm

      Interesting commentary 2nd. I read another’s crystal ball gazing dated 14th July and he was net short – up to 90% in some of his accounts. Would have burned himself if he hadn’t performed some money management. So the pros have been bearish this past week. And as it seems from Tim Knight’s example, HB&B can squeeze the shorts some more.

      Interesting point I noted from this analyst’s chart illustration. 30 year Dow chart with three diverging trend lines. He bought in at March on the back of the Dow touching one of those trend lines. Have a look where the Dow bounced and the lowest support trend line that it could possibly fall to.

      • davefairtex(118083 comments)-
        July 19, 2009 at 7:50 pm

        Just my opinion, but I think these guys will take the easy road out and just have us bounce up and down inside the trading range. There’s no reason to stage a breakout either direction, and the longer we can move sideways the more time the economy has to heal – at least according to the Fed. I think it’s just buying time for the housing price correction to run its course, and for the net interest spreads to slowly earn their way out of the hole they’re in right now.

      • Quasi(118083 comments)-
        July 19, 2009 at 9:07 pm

        Les, just be careful when looking at and drawing conclusions from any long term charts that are drawn using a linear scale, like the ones in your link to FSU. I can’t understand why anyone would use linear charts for anything other than short term where there isn’t much change in the price scale.

        Problem is what does a constant rate of change (say 5%/year) look like on a linear chart, its parabolic. Now everyone draws straight lines which are really diminishing rates of change and then tries to interpret them as support areas.

        Now on a log chart (actually semi log, linear time/log price), that same 5%/year is a straight line and any deviation of stock price is easily identified. The other important factor is that events over time have the same percentage scale, ie the current market crash is very similar in percentage terms to the 87 crash. But on a linear chart the 87 crash only looks like a small blip.

        Here’s a few notes I wrote on this subject last fall, along with some charts. Its over on the Stockcharts users forum on the IHUB website, link below. Note you can read anything on the board but if you want to post you’ll need to do the free sign up thing.

        • MarkW(118083 comments)-
          July 20, 2009 at 12:44 am

          Nice work Quasi- I had to read it twice, but now see it. Thanks.

  111. Chickenpookie(118083 comments)-
    July 19, 2009 at 4:59 pm

    Has anybody been looking into next week’s earnings portrait? Monday’s forecast doesn’t look very encouraging to me at the moment.

  112. Illini(118083 comments)-
    July 19, 2009 at 5:25 pm

    …. is up. Should be a good one to really study and find out what led the market upswing.

    • Bill Cara(118083 comments)-
      July 19, 2009 at 5:33 pm


      I’m not so sure it was a good one. I quickly looked at prices and then partied yesterday from 3pm til midnight, then wrote as fast as I could, expecting to party more today. Tonight, though, I ought to spend more time with the charts, and by about Wednesday, I should be good to go.

  113. Chickenpookie(118083 comments)-
    July 19, 2009 at 6:34 pm
  114. mntinhi(118083 comments)-
    July 19, 2009 at 6:45 pm
    • Chickenpookie(118083 comments)-
      July 19, 2009 at 11:05 pm

      mntinhi – “The first thing I noticed (been away for a year at the farm) was that there were virtually NO ships unloading.”

      Pre-recession for many years straight, I noticed 80% of the ships coming into the harbors were unloading only, showing lots of freeboard leaving harbor. This was one clue that the global trade imbalance situation was not going to end well.

      I hope Chris Laird will let us know when the empty ships return in order to load cargo, leaving harbor low in the water. A sign of a long awaited reversal of trade imbalance.

  115. NYUGrad(118083 comments)-
    July 19, 2009 at 11:21 pm
  116. NYUGrad(118083 comments)-
    July 20, 2009 at 12:13 am
    • kaimu(118083 comments)-
      July 20, 2009 at 12:59 am

      ALOHA !!

      NYUGrad … Thanks! I am sure he will twist it into some anti-Capitalist rage,but what we have now is as far from true Capitalism as you can get. We all now reside in the Kingdom of The POLITBANK, where Crony Socialism prevails! Many here will say different but all one needs to do is get into the bowels of a Public Works project to see reality … My God every Fortune 500 company from Lockheed to Cisco exists directly or indirectly on US government contracts!

      It seems Moore will mainly focus on the surface of the monetary crisis and go after CEO PAY! Maybe he might even delve into the realm of Cramer and TARP, but I would be surprised if he went to any great depths with the actual mechanics of our fiat monetary system.

      Will he even mention the US government as the major culprit? Will he dare to besmirch Obama? Highly doubtful …

      Entertaining bank gags at best!

  117. Bill Cara(118083 comments)-
    July 20, 2009 at 2:05 am

    Monday: Halliburton, Eaton, Boston Scientific, Texas Instruments, Johnson Controls.

    Tuesday: DJIA components Coca-Cola, United Technologies, DuPont, Caterpillar, and Merck. Also, Apple, Advanced Micro Devices, Yahoo, Seagate, Forest Labs, United Health, Schering-Plough, Starbucks, Lockheed Martin, Freeport McMoran, Peabody Energy plus airlines Continental Airlines, UAL, Southwest Air.

    Wednesday: DJIA components Pfizer and Boeing. Also Pepsi, Whirlpool, EBay, Mosaic, Glaxo, Genzyme, Altria, St. Jude Medical, Air Products.

    Thursday: DJIA components AT&T, McDonald’s, Microsoft, American Express, and 3M. Also Bristol-Myers Squibb, Ford, Philip Morris, UPS, Union Pacific, Newmont Mining, Diamond Offshore, Wyeth, Celgene, New York Times, Kimberly-Clark, Raytheon, Starwood Hotels, Potash,, Juniper Networks, Broadcom, EMC, Hershey.

    Friday: Black and Decker, Schlumberger, Ashland Oil, Fortune Brands, Ericsson, Ingersoll-Rand.

  118. Bev(118083 comments)-
    July 20, 2009 at 2:36 am

    I went dark on the market at Thursday’s closing. Needed to decompress. So I been trying to play catch up all day today. So much data to look over and process that my head is now spinning and I have yet to review the comments here in the community since Thursday [4PM] on.

    So as for a road map, it seems every where I read you could find a good justification for any scenario. But here are two which stuck out. The attached chart is by a good Elliottitian [“mole”] and the other is made from information posted by options traders [Fujisun & Keirsten] who believe we maybe forming a double H&S. Found there was some debate as to whether the height of the right shoulder #2 has nullified the pattern. Seems the well known chartists are split on this one.


    [Double H&S in 2006-08 ?

    One thing that seem everyone is watching is the $USD especially the Elliottitians who are closely watching the wave count. Sorry I have nothing really solid to post but it seems like a lot of traders are still unsure of this rally.

  119. bobj(118083 comments)-
    July 20, 2009 at 2:50 am

    “I need to think carefully about what I write because it will be so completely opposite to what I (and you) have been “taught” for 50 years, and I don’t need (more) enemies.”

    Bill, please don’t “sanitize” it. We have high expectations of getting the straight goods from you. It will be interesting to compare your experiences to those of my uncle that toured all through Cuba a year or so ago. I expect they will be similar!

    To kaimu, that was a very generous offer. I hope there were a number that took you up on it.

    This is quite a community! Hopefully we’ll meet in Freeport (on a stopover to Havana?)

    • Illini(118083 comments)-
      July 20, 2009 at 3:37 am

      I second the motion of Bobj. I want to hear how much you enjoyed your stay and if you found the people friendly and surroundings pleasant. In USA we don’t have the opportunity that you had. FREEDOM, where are you?. It’s ridiculous. It’s embarrassing. It’s cold war politics. It’s Miami.

  120. NYUGrad(118083 comments)-
    July 20, 2009 at 3:09 am
    • loannetter(118083 comments)-
      July 20, 2009 at 5:25 am

      The facts are clear: if someone helped you into a mortgage that is now going sour because you employed some ruse like stated income or fake documents to get into a house you could not afford: RUN DO NOT WALK to the nearest exit NOW. No amount of new or modified debt will make that payment ‘affordable’ unless you do win the Lotto. If the same someone helped you get into more investment house(s) than you could afford to keep because you were already relying on 100% financing and rents to hold you up, and now rents have fallen and your tenants can’t pay you: RUN DO NOT WALK to the nearest exit NOW. If the someone who helped you achieve either of these things suggests they can now ‘help’ you get a loan modification: RUN DO NOT WALK to the nearest exit NOW. It took me about three months to interview loan modifiers, trialing the system (for another three months) before finding a resource who checked out. I feel confident my homeowners will get a fair shake; clients who–by the way–were not my clients when they got in trouble. If it takes me that long to find a decent resource and I happen to be in the business and operate in a state that has outlawed the abusers– imagine how hard it is for a befuddled person deep in debt and hounded by collectors to find help? Besides there are all these companies calling themselves Federal this and American that and Affordable-Stimulus-Modifiers of which about 80% are crooks by the smell of them. It’s a sad in American when we can’t find people to trust.

      The good news is –you CAN, if you have the stamina and your wits about you, pick up the phone, call your lender, and give them all you’ve got. The whole truth and nothing but. A word of caution: by truth I mean what is specific and relevant. Be succinct. Don’t whine and for goodness sakes don’t tell them you are going to go to boogey down to Cabo next weekend and you’ll check back later if you get my drift. And if they offer you something that smells higher you need to fight hard for what you can afford even if it takes 40 or 50 years to pay it off. Lowering your payment until you can sell the home in a few years without losing your shirt may be plan B in all this. So if you decide to handle this yourself: 90-120 days later of getting to know your debt mitigator and outsmart their circular phone voice mail system, you will be able to sleep again. Expect to send the same 100 pages of information at least three times to different people. Put little sticky labels with your loan numer on every single page of everything you send them. Expect them to never return your phone calls. Expect them to be very dismissive and careless. You, on the other hand, must be extremely polite, persistant and thorough. You must record every conversation, name, date, phone number, legal term, and piece of information you share by fax and phone log. AND it helps if they like you. Whatever it takes. All the best.

      (Our our state recommends a $1,500 fee and work must be performed by a licensed loan officer or broker. Lawyers, I dare say, charge what lawyers charge; they must be licensed in your state, not some fly by night prepaid legal glorified collection service. FYI: If you don’t know a lawyer in your town who specializes in real estate or bankrupcy, ask around for a personal referral or call the state bar associaton)

  121. Bill Cara(118083 comments)-
    July 20, 2009 at 9:04 am

    Apparently the server was knocked out of service for a while last evening (see following message). It appears to be ok now.

    SEA2 Connectivity We are again experiencing connectivity
    issues in the SEA2 data center due to a network flood and are working as
    fast as possible to mitigate this flood and believe that it should be
    dying down at this time, however service is still affected for some
    customers; this ticket will be updated as soon as we have more
    information regarding the status of the problem. Thank you, ~SEA2 Staff.

  122. Les(118083 comments)-
    July 20, 2009 at 9:57 am

    USD bombing is it?

    THANKS QUASI! Difference noted. Recall article distinguishing between the two types of charts for trend lines. Thanks for reminding me.

    Bev, sorry mate but I was too stupid to link the site you offered us where I could see the greenback against other currencies in real time. Could you post it again please? TIA

  123. Les(118083 comments)-
    July 20, 2009 at 10:35 am

    “Fed Chairman Ben Bernanke will take centre stage this week when he presents his semi-annual update on monetary policy and the economy to Congress. The markets will be looking for signs that the Fed might expand its quantitative easing programmes. However, the minutes from the last FOMC meeting suggest that the Fed is reluctant to do so”

    Will this invoke a negative reaction? Seems to be an up day today judging by world markets. Some consolidation when Ben the chopper steps up to the plate?

  124. Ron Sen(118083 comments)-
    July 20, 2009 at 10:42 am
  125. JVS3(118083 comments)-
    July 20, 2009 at 10:48 am

    Your actions have overwhelmed my ability to articulate in typed words.

    May your God bless you and all those you love.

  126. Les(118083 comments)-
    July 20, 2009 at 11:05 am

    triangle and the dollar may retest 71 while risk is in, Navarro has a couple of offers that can play against the USD during this SPX rally/USD downtrend.


  127. Bev(118083 comments)-
    July 20, 2009 at 11:47 am

    Halliburton says its second-quarter profit tumbled 48 percent as sluggish exploration and production activity, particularly in North America, crimped results.

    The oilfield services company, which has corporate headquarters in Houston and Dubai, said Monday its net income for the April-June period fell to $262 million, or 29 cents per share. That compared with $504 million, or 55 cents a share, a year ago. Revenue fell 22 percent to $3.5 billion.

    One-time items aside, Halliburton said earnings amounted to $274 million, or 30 cents a share.

    Analysts polled by Thomson Reuters were expecting earnings of 27 cents a share and revenue of $3.43 billion.

    Halliburton kicked off the earnings period for the oil and gas sector. Most forecasts predict significantly lower year-over-year results for producers and service companies.

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