Cara’s Commentary & Community Chat, Mon., Feb. 23, 2009

[8:15am ET] Since when is

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230 Comments

  1. mayhem991(118083 comments)-
    February 23, 2009 at 1:36 pm

    If the banks depositors are protected, the national economy is restored, and the stockholders are fairly compensated or are guarenteed their ownership back after a reasonable period of time, I could live with that. But if the governments usual heavy handed decrees are allowed to rule, then I would be one of the first to advocate a different process.

  2. Bull Hunter(118083 comments)-
    February 23, 2009 at 1:37 pm

    Good morning.

    Upgrades:

    XOM – to Buy @ Deutsche Securities. Price Target Raised from $70 to $80

    Downgrades:

    JCP – to Underweight @ Thomas Weisel
    RIO – to Hold @ Canaccord Adams
    TCK – to Neutral @ HSBC

    Price Targets Lowered:

    FSLR – from $210 to $175 @ Collins Stewart
    GE – from $17 to $12 @ Deutsche Securities
    GOOG – from $450 to $435 @ Collins Stewart

  3. nemo(118083 comments)-
    February 23, 2009 at 1:46 pm

    “We free market patriots need to stand on guard as I fear that, when all is said and done, semantics could result in the taxpayer being sold A, but ending up buying B.”

    Why would today be different…”They” had an opportunity with the “Stimulus” bill to change the way they do things. What did we get? Your regular-old spending bill with a nice title. The same players that have been in power, are in power. Now, think about how hard it is for us as individuals to change; how the hell do you get governing bodies, sclerotic bureaucracies, and wealthy special interests to change?

    The top of the pyramid will always be fine, the destruction wreaked always falls to the herd.

  4. Craig(118083 comments)-
    February 23, 2009 at 1:51 pm

    I think bill mentioned the new flash player goofing with his system.
    Did the same to mine, sucked up half my memory sitting there doing nothing and slowed my laptop to a crawl. Even caused a time delay switching screens for crying out loud. Uninstalled and working much better.

    If you are suddenly running very slow and installed the latest flash player you might check it out. I went back to the previous release.

    I think the WIR was awesome.

    It captured where we are exactly….too low to short and too close to support/resistance to commit without confirmation of direction.

    Thank You Bill.

  5. bigwad1(118083 comments)-
    February 23, 2009 at 1:56 pm

    The trade of the generation.
    Sounds like you are getting beat down a little Bill…..don’t let them break your honesty.
    If enough money is siphoned off stimulus for stem cell research, maybe some grade school student can discover how to kill off those bankers DNA gene that promotes greed and corruption.

    Lesson for the day……
    How can a corrupt government nationalize a corrupt bank???

  6. NYUGrad(118083 comments)-
    February 23, 2009 at 1:57 pm

    Sold all shares i bought last week at 6.50usd. quick 7% gain

    Cash position for now.

  7. rhodnett(118083 comments)-
    February 23, 2009 at 1:57 pm

    “The total restructuring of financial services, including bank regulations, that by law prohibit conflict of interest that in any way might adversely affect the customer”
    What Congress is going to do this? They are so conflicted with interest that they can’t accomplish anything worthwhile.

  8. tango6(118083 comments)-
    February 23, 2009 at 2:06 pm

    covering all shorts and standing aside on the threat of a strong bear rally.

  9. dr.cosa(118083 comments)-
    February 23, 2009 at 2:10 pm

    we are sitting at the precise point in which our fortunes are at stake for those vested in gold miners.

    gold is a touch lower as the dollar is moving back towards its friday’s close, the futures markets are up on optimism of partial nationalization alongside oil.

    because the gold miners failed to move much higher when gold screamed towards $1000 will gold stocks now fall in the absence of gold strength, or will they stay buoyant alongside a broad market rally.

    if they can at least hold their levels w/ gold down a few bucks id be more optimistic they can eventually clear overhead resistance on the next leg up in gold. if they show weakness and fall hard w/ a soft gold price i will be out of gold miners completely as they would lack any real upside vs. gold bullion if they cant rise w/ gold on a relative basis, but will fall hard w/ any sign of weakness.

    im happy the miners didnt fall while the rest of the market tanked, of course, but gold exploded higher, it should have been the least we can expect. w/ barrick and other majors announcing a mixed bag of earnings im still suspect of what is actually happening with these companies. mabey the large cap gold will begin to diverge somewhat from eachother going forward w/ the quality shares advancing in the face of stagnant moves in others as opposed to the rising tide lifting all boats.

    over all a rally in the broad market will be a great signal to the gold crowd.

  10. ChrisM(118083 comments)-
    February 23, 2009 at 2:11 pm

    Reposting from last night:
    I’m trying chrome to avoid the JS issues I get with FF, but chrome doesn’t respond to my touchpad equivalent of the mouse scrollwheel. I see a complaint about it on chrome help, but no response. Anyone have a solution?

    • yvrapx(118083 comments)-
      February 23, 2009 at 6:20 pm

      Have been using Chrome for a while on my PC, works fine, mouse scrollwheel and arrow down. What touchpad equivalant r u using? BTW Am on XP Pro

      • ChrisM(118083 comments)-
        February 24, 2009 at 1:10 am

        yvrapx, thanks, I’d forgotten about the arrow down, which works fine. touchpad works fine on all apps except chrome, so I assume it’s a chrome specific issue. As I understand it, the OS passes most keyboard/mouse events to the currently active task which can then decide whether it’s relevant input, so it seems that chrome is choosing to ignore the “scrollwheel” (synaptics on an HP pavilion with XP home). I’ll either get used to using the arrow down, or switch back to FF.

        • yvrapx(118083 comments)-
          February 24, 2009 at 1:29 am

          Good luck and I would put upw/the small hings w/Chrome it is just a whole lot better than FF. Am a Mac guy found most websites are IE geared so Safari wasn’t an option then came FF and I was in love, great browser. Unfortunately FF and it’s newer versions are slower and more unstable than the first few, had to drop on my PC but there is no Chrome for Mac, yet. Will change once it’s up.

          • OldGoat(118083 comments)-
            February 24, 2009 at 2:22 am

            I will not switch to Chrome until/unless a “master password” feature is implemented. Too insecure otherwise.

  11. bobbyo(118083 comments)-
    February 23, 2009 at 2:11 pm

    I don’t understand how this is going to help C or the overall financial crisis. It is akin to building a brand new patio on a burned down house. “Lets see no one else is stupid enough to buy city stock so we will?”

  12. 2nd_ave(118083 comments)-
    February 23, 2009 at 2:13 pm

    ” No “systemically important” financial institution will be allowed to fail, the Treasury Department and Federal Reserve and other bank regulators said Monday. The stress tests will begin on Wednesday, Feb.25.”

    http://tinyurl.com/ddu9ut

    That should be enough for at least a two-day rally?

  13. Craig(118083 comments)-
    February 23, 2009 at 2:20 pm

    “Spot gold made a false break above $1000 before retreating to test short-term support at $990. Respect of support would be a bullish sign, while reversal below $970 would warn of a secondary down-swing. The long term target for breakout above $1000 is $1200, based on the large recent descending broadening wedge: 900 + ( 1000 – 700 ).”

    So, just as I need convincing for anything more than a tradeable bear bounce, I will need to see gold hold 970 (or thereabouts). GLD/GFI/GSS seem to be holding this AM. I nibbled a little. we’ll see….. Good Luck Dr. Cosa!

  14. shark_attack(118083 comments)-
    February 23, 2009 at 2:24 pm

    The old 2002 support will act basically like a 2-way swing area. Traders will maintain a bullish bias above it, and should it meaningfully descend below those approximate levels, a bearish one.

  15. 2nd_ave(118083 comments)-
    February 23, 2009 at 2:32 pm

    😉

    • Mark Barry(118083 comments)-
      February 23, 2009 at 2:50 pm

      2.08 Same reason. out 2.19, 9.5%

  16. dr.cosa(118083 comments)-
    February 23, 2009 at 2:33 pm

    i usually ignore the first 1/2 hour of trading when gold acts erractically like it is right now, getting smacked just as the market opened.

    a little too well-timed imho.

    lets see what happens after the rinse-out.

  17. NYUGrad(118083 comments)-
    February 23, 2009 at 2:35 pm

    I am going to wait until i see volume pick up either way on tech stocks and precious metals.

  18. shark_attack(118083 comments)-
    February 23, 2009 at 2:41 pm

    Took myself a nice bite out of the UAUA move. I think I broke a sharks tooth on that 737:)

  19. sammas(118083 comments)-
    February 23, 2009 at 3:01 pm

    probably old news for most here, but too interesting not to post is this eliot spitzer-authored article in the washington post from 2-2008 wherein he claims gov use of an archaic 1863 law to stop states from going after predatory lenders:

    http://www.washingtonpost.com/wp-dyn/content/artic

  20. SiO2(118083 comments)-
    February 23, 2009 at 3:13 pm

    NCX was on our straddles list for Feb. Today +297%, sigh…

    Heard on BNN: “The opposite of Pro is Con, the opposite of Progress is Congress.”

  21. fireworks(118083 comments)-
    February 23, 2009 at 3:25 pm

    After being hit at both the London and NY opens, gold appears to be bouncing back in a good show of strength. With the DOW weakening and likely in for another PPT supplied roller coaster day, we will see if gold can take another run at the $1000 level. Gold stocks are subdued right now so they would have to wake up soon to confirm.

    • FranSix(118083 comments)-
      February 23, 2009 at 3:55 pm

      As far as the futures trade in gold goes, we still have options expiry this Friday on the COMEX.

  22. EDC(118083 comments)-
    February 23, 2009 at 3:52 pm
  23. SiO2(118083 comments)-
    February 23, 2009 at 3:57 pm

    IWM Mar 41-40 requires 11.25% max move
    UCO 6-7.50 requires 30% max move

    There are 25 days to expiration. If the stock moves, there will be still lost of residual value left on the wrong side, so the moves required are significantly lower at this point in time (up to 1/2 of the above, depending on the underlying stock move).

    Note that UCO is up 12% since last week.

    Tracking at http://straddles.nexalogic.com

  24. shark_attack(118083 comments)-
    February 23, 2009 at 4:02 pm

    Seems like for a long time going long has meant being wrong.

    The way to make money has been SHORT in a BEAR market duh (refer to Gartmans RIDICULOUSLY simple trading rules).

    What needs to happen maybe is for many of the longs to throw in the towel, to quit or be destroyed so that the shorts have no one to play against, forcing the shorts, the successful winners of the recent years’ action, to adopt more neutral, sideways and maybe long strategies.

    Whaddayathink?

  25. Illini(118083 comments)-
    February 23, 2009 at 4:04 pm

    Anyone seeing capitulation in LLY today at 32.90?

    • danielj(118083 comments)-
      February 23, 2009 at 4:45 pm

      looks like orderly selling to me with imminent test of last Oct and Nov lows

  26. BillySundance(118083 comments)-
    February 23, 2009 at 4:05 pm

    I was wondering if anyone here has used the Oracle 10G freeware database and had any thoughts to share? Does anyone have any experience with this software? I have used an Oracle database for data entry at previous jobs but am not very familiar with the “architecture” of a database.

    The reason I am trying to familiarize myself with it is that I want to try to consolidate some of the information I have collected on junior gold producers and build a framework for looking at the industry (and perhaps someday a database that could build custom reporting by various category – I.E. country, mine size, continent, stock exchange, etc).

    TIA!

    • nemo(118083 comments)-
      February 23, 2009 at 4:17 pm

      Why don’t you look at the OpenOffice product?

      • BillySundance(118083 comments)-
        February 23, 2009 at 4:40 pm

        I guess I should check out OpenOffice as well.

        Perhaps my question really is, what is the best platform for a relative novice to start building a database?

        • szh(118083 comments)-
          February 23, 2009 at 4:47 pm

          Billy,

          I am just new to this forum, but using 10g for the past few months.

          Which operating system (ie. linux or Windows) do you want to install the 10g. In windows, the 10g consumes lot of resources and the startup time for windows is few more minutes and degrade the performance of the OS.

          Installing 10g on a linux OS is a good choice. May be you should consider mysql database as an alternative and it’s light weight.

          Hope this helps.

          Szh

        • szh(118083 comments)-
          February 23, 2009 at 4:59 pm

          Windows is easier to start with, just in case if you aren’t familiar with linux. To make stable run, linux is better.

          Oracle 10g tutorial:
          http://st-curriculum.oracle.com/tutorial/DBXETutor

          mysql tutorial:
          http://www.webdevelopersnotes.com/tutorials/sql/my

          • BillySundance(118083 comments)-
            February 23, 2009 at 5:39 pm

            szh

            Thanks for the recommendations. I had uploaded Oracle 10g on Windows but have only had time to do some basic stuff so far.

            I am looking into MySQL now. It looks a more simplified and less burdensome on the OS.

          • proudPapa(118083 comments)-
            February 23, 2009 at 5:45 pm

            I also recommend MySQL, actually just installed it last night. Also get the MySql workbench which is useful for data modeling. Just install with all the default settings and it works pretty lickity split. I use Oracle at work, and while a great DB, it’s too much of a pig for small projects if you ask me. Don’t know how streamlined the free version is, but I doubt much.

        • everyman(118083 comments)-
          February 23, 2009 at 6:21 pm

          what is the best platform for a relative novice to start building a database?

          This is a very important question! In short, my experience with proprietary database software is .. frustrating, overrated, complicated, somewhat opaque and distorted by marketing speak. In the most inappropriate places such as the documentation, you are forced to confront their marketing schmooze, which often hides (deliberately) how the system really works, which in the end you really will want and need to know.

          Open source fans get sucked in, too, the prime example being the MySQL system, which is marketed like a proprietary one. Actually, it is owned by Sun. Also, it is a middle tier performer.

          Without knowing the details of your future needs, I would still recommend that you select PostgreSQL, which is the most sophisticated open source database system yet very friendly to learn amd it is an enterprise-level system like Oracle. It is also considered perhaps the most secure database system. Also PostgreSQL is truly open source, which means that no-one can decide to take it off the market at some future date and leave you stranded.

          One additional thought. Apart from selecting the “engine” for your database, a most important consideration (the one almost always underestimated) is the design of your databases; something that no database engine can make up for. I remember reading about statistics of the U.S. Labor Department showing that software projects in America had a failure rate of 40% and that half of the time these failures were due to poor database design. No other industry experienced such high rates of failure. So design is key number 1.

          The PostgreSQL website is here: http://www.postgresql.org/

          The place to learn about designing databases properly is here: http://orm.net/

          The number one expert on database design is Dr. Terry Halpin whose company Visio was bought out by Microsoft some years ago. However, the last product version of Visio, called VisioModeler, was available for free download from Microsoft. Apparently, it still is. Find it here: http://tinyurl.com/bk5yov

          Good luck. Have fun. I am sure you will love PostgreSQL and designing with ORM.

          • BillySundance(118083 comments)-
            February 23, 2009 at 9:23 pm

            everyman

            I will have to take a closer look at PostgreSQL as well as MySQL. Also, orm.net looks like a good resource to get familiarized with. My project is in its infancy so I am just trying to put a basic framework behind it before I get in too deep. Thanks for your notes on databases. Very much appreciated.

  27. dr.cosa(118083 comments)-
    February 23, 2009 at 4:12 pm

    gold took a hit early on and rose back towards friday’s closing price, dipped then bumped up against it again. it is now moving down a few dollars, w/ the gold shares are looking neutral, accept for barrick which is looking weak and the STO/RSI have crossed downwards. but volume is flacid, so its difficult to say than any possible down move has conviction.

    for the short term i dont like the action in gold failing to break above friday’s close on 2 attempts, and barrick is really pulling down otherwise good shares like NEM and GG at the moment. again, gold’s short term behaviour for some time has been to base and plunge hard when it fails to breach overhead resistance of the past few sessions. the bounces off $992 were almost too textbook, just like the dump at the open.

    in a holding pattern for now, but really watching closely with so many large gold issues bumping up against the 200 MA’s, a break above or below will prove decisive imho.

    one big surge in gold above $1000 w/ a few days close above will convince alot of people on the sidelines to go long imho. but will we get it?

    • FranSix(118083 comments)-
      February 23, 2009 at 4:23 pm

      In reasonable terms, we have a retest of the previous high, then a correction for spring. But I would not necessarily become pessimistic at that point, since its likely that the price chart will be repeating or making a similar move as it had when it tested the last high at $730.

      I presume that some of the currencies that had dropped heavily against both the Yen and the Dollar will have to fill the gaps at some point on their weekly charts, so their record price breakouts in gold will also appear to hold for the time being. I believe the forex is probably the best indicator going forward, though we haven’t seen any major rebounds.

      If these currencies such as the CAD or the POUND continue to depreciate along with the AUS, then it won’t necessarily reflect badly in the gold price at all, but instead support it as it feeds back into the $US price.

  28. NYUGrad(118083 comments)-
    February 23, 2009 at 4:18 pm

    Also watching CRM and INFY.

    Disc: Cash and SLW

  29. sammas(118083 comments)-
    February 23, 2009 at 4:22 pm

    Ben Graham quotes in his book The Intelligent Investor that…

    One of the most persuasive tests of high quality is an uninterrupted record of dividend payments going back over many years. We think that a record of continuous dividend payments for the last 20 years or more is an important plus factor in the company’s quality rating. Indeed the defensive investor might be justified in limiting his purchases to those meeting this test.

    http://www.boardcentral.com/articles/1774_Ben_Grah

    anyone else find it odd that berkshire does not pay a dividend at all?

    • Chickenpookie(118083 comments)-
      February 23, 2009 at 4:48 pm

      Corporate greed has killed the value of dividends as an indicator of quality, IMO. They’ll play games with the divvy to suck you in just before insiders sell.

      Berkshire – IMO, there seem to be too many extravagant corporate parties and outings. I don’t live this way, and I suspect a great deal of shareholder money is wasted. They aren’t invincible, but would have you believe they are and that is insulting to your intelligence. Yes, it’s probably a good buy right now if the economy doesn’t slip off the cliff’s edge, but all things being equal, there are many other much better buys available.

  30. sammas(118083 comments)-
    February 23, 2009 at 4:32 pm

    http://www.huppi.com/kangaroo/Timeline.htm

    1933 – Alarmed by Roosevelt’s plan to redistribute wealth from the rich to the poor, a group of millionaire businessmen, led by the Du Pont and J.P. Morgan empires, plans to overthrow Roosevelt with a military coup and install a fascist government. The businessmen try to recruit General Smedley Butler, promising him an army of 500,000, unlimited financial backing and generous media spin control. The plot is foiled when Butler reports it to Congress.

    1934 – Sweden becomes the first nation to recover fully from the Great Depression. It has followed a policy of Keynesian deficit spending.

    1945 – The top tax rate is 91 percent. It will stay at least 88 percent until 1963, when it is lowered to 70 percent. During this time, America will experience the greatest economic boom it has ever known.

    • nemo(118083 comments)-
      February 23, 2009 at 4:49 pm

      Yes, but we and the Swedes weren’t in the debt we’re already in , nor, regarding the tax rates, should you forget, that after WWII we were the only industrialized country

      • Chickenpookie(118083 comments)-
        February 23, 2009 at 5:06 pm

        nemo – “the Swedes weren’t in the debt we’re already in”

        You make many great points, and if I may add, the Chinese are not in debt to us at the moment, nor do they hold toxic assets (other than Treasuries, which some question toxicity) neither are the Japanese, etc. The Chinese stimulus is much larger than the US stimulus as well, in terms of GDP ratio. We still buy more from them than they buy from us, and that will never change, as this still holds true for Japan, and many other US trading partners.

        The USD must come down.

      • teamonfuego(118083 comments)-
        February 23, 2009 at 6:06 pm

        Debt to GDP during GD was quite high…not much lower than it is now in fact.

  31. TN_blogger(118083 comments)-
    February 23, 2009 at 4:42 pm

    Sammas: 11:32

    “1933 – Alarmed by Roosevelt’s plan to redistribute wealth from the rich to the poor, a group of millionaire businessmen, led by the Du Pont and J.P. Morgan empires, plans to overthrow Roosevelt with a military coup and install a fascist government. The businessmen try to recruit General Smedley Butler, promising him an army of 500,000, unlimited financial backing and generous media spin control. The plot is foiled when Butler reports it to Congress.

    1934 – Sweden becomes the first nation to recover fully from the Great Depression. It has followed a policy of Keynesian deficit spending.

    1945 – The top tax rate is 91 percent. It will stay at least 88 percent until 1963, when it is lowered to 70 percent. During this time, America will experience the greatest economic boom it has ever known.”

    Did the boom come from a lower tax or baby boom?

    • sammas(118083 comments)-
      February 23, 2009 at 5:09 pm

      i didnt write the timeline, but my interpretation of what is written would be that the boom was from 1945-1963, thereby implying that the boom was from a HIGHER top tax rate. anyone remember anything significant from 1963? oh, right.

      • nemo(118083 comments)-
        February 23, 2009 at 5:13 pm

        Vietnam, Kennedy assasination, other countries getting on their industrial feet? Also, the US basically funded the beginning of that boom with the Marshall Plan.

    • indyrjc(118083 comments)-
      February 23, 2009 at 5:12 pm

      “1934 – Sweden becomes the first nation to recover fully from the Great Depression. It has followed a policy of Keynesian deficit spending.

      1945 – The top tax rate is 91 percent. It will stay at least 88 percent until 1963, when it is lowered to 70 percent. During this time, America will experience the greatest economic boom it has ever known.”

      The Keynesian spending theory also assumes that a country starts with modest budgets deficits and will extinguish all deficits after recovery. We’re starting from a big hole this time.

      The top tax rate only applied to a few very wealthy individuals. Most middle class people and business owners weren’t effected by it. And there were so many loopholes in the tax code that almost no one paid the top tax rate. It was these loopholes (that were enjoyed for decades and allowed many wealthy and politically connected individuals to pay almost no taxes at all) that led to the passage of the Alternative Minimum Tax and we all know how that has played out.

  32. Pillzilla(118083 comments)-
    February 23, 2009 at 4:47 pm

    seems to late to get short again
    we are fast approaching critical s&P support level…..possible bounce. Not sure I’ll trade it. Still licking FAS wound from last week.

    of course I thought it was to late to get short around dow 9300. : ‘ )

  33. OldGoat(118083 comments)-
    February 23, 2009 at 5:04 pm

    Teetering on the edge of the abyss at 755, just above Friday’s low.

    • Pillzilla(118083 comments)-
      February 23, 2009 at 5:08 pm

      very tempting to trade it long side…for computer program buying that may occur at this level.

      If 755 fails it could be awhile before we see any support IMO.

      • OldGoat(118083 comments)-
        February 23, 2009 at 5:20 pm

        I agree that odds favor a move higher. If it fails here, next interim support should be down around 706, presaging an eventual move to or below 660. JMO. Not advice. DYODD.

  34. NYUGrad(118083 comments)-
    February 23, 2009 at 5:13 pm

    They will not do right by the tax payer without being forced to. and right now nothing is forcing them to screw themselves over for the good of all mankind. they are being forced to act and beg for aid and testify on capital hill. Maybe give up some bonus and private jets. but they are not going to leave their jobs, mansions, ferraris, helicopters, hookers without a fight. and the people of this country have not faught back 1 bit, yet.

    i predict it will get more “screwy” before i drink any kool-aid. I will know when there is true change when people are no longer commuting to work, rather commuting to washington dc to protest.

  35. NYUGrad(118083 comments)-
    February 23, 2009 at 5:17 pm

    I just don’t get it. that property is paid for by funny money, thus being paid by us the tax payer. his amenities are prob better than Obama’s.

  36. jock(118083 comments)-
    February 23, 2009 at 5:20 pm

    For those interested in Mexico’s plight, two recent articles from WSJ and LATimes:

    http://online.wsj.com/article/SB123518102536038463

    http://projects.latimes.com/mexico-drug-war/#/ques

    The first has an amazing slide show, the second has tabs at top with great graphics showing the geographic extent of the problem.

    If you’re interested in silver, or investing in Mexico this is important background.

    BTW, there’s a great barometer for when and where to invest in Mexico: Carlos Slim. IMHO, he’s a better business man than Bill Gates OR Warren Buffett. AND, he’s the only one of them who thrives on chaos.

    He made his mark in the 1982 Mexican debt crisis, when most rich Mexicans pulled out their money. Carlos bought cigarette, restaurant, brokerage, tire, copper wire and financial companies at the bottom. He is a world-class turn around artist. His actions in the 80’s gave him credibility for the privatizatin of Telmex, which launched him into becoming the world’s 2nd richest man.

    Loooking forward, I’ll follow his lead by watching his Grupo Carso; by the time this “great unhappiness” is over, I expect Carlos Slim will be MUCH richer than Gates or Buffett.

    Carlos will likely own half the country. Will the drug lords own the other half?

  37. nemo(118083 comments)-
    February 23, 2009 at 5:21 pm

    How fortunate for governments that the people they administer don’t think.
    -Adolf Hitler

  38. Grym(118083 comments)-
    February 23, 2009 at 5:25 pm
  39. jack black(118083 comments)-
    February 23, 2009 at 5:25 pm

    What is McHugh’s view on this sell off? Wasn’t 2/19/09 supposed to be a major turn date for the markets? My free subscription expired.

    FD: long as I thought Friday was a reversal day (in retrospect, this AM was a great moment to sell, but who would have known?).

    • proudPapa(118083 comments)-
      February 23, 2009 at 5:42 pm

      I asked same thing. He was expecting a little more downside before big upside move for weeks/months. Then the epic crash…

  40. Chickenpookie(118083 comments)-
    February 23, 2009 at 5:40 pm

    We’ve exported our jobs with NAFTA, lifted human rights trade sanctions on China, and imported workers. Which of these things creates jobs for Americans? I fail to see how the jobless American can make mortgage payments, tax payments (to cover federal deficit) and continue the pace of consumption.

    The bleeding must stop. We must stop borrowing from the future, we must monetize the debt. Monetizing the debt will allow us to pay for our past sins now, but can only benefit long term if government will accept their fiscal responsibilities through responsible legislation and oversight, or by enacting a gold backed currency(forced honesty). This must happen, or our financial stability will be doomed by our past choices of prioritizing consumption over production.

    • EDC(118083 comments)-
      February 23, 2009 at 11:44 pm

      CP

      We really don’t need to monetize the debt and in fact we don’t really need China to buy our debt, with an increase in savings rate here in the states; as the savings picks up will be enough to compensate in treasury buying. Panecea is not the answer (berneke), thoughtful thinking will be a strategy and eventually lead to a solution (independent thinkers, not from hbb). We have excess capacity for investment even as this recession/dep continues on. The resources are here in this country, the problem is the rules as they change on the fly or there is no confidence.

      You are correct the bleeding must stop, but the bleeding is LACK of leadership on K street and all over washington. We thought we elected a leader but is obvious we elected someone who is real good at taking orders for those that he serves. It is a shame but nevertheless it is the hand we are delt and we must deal with it.

      Once K street gets their crud together, next will be rebuilding the middle class, to me that means total banking collapse and system reset with a little help from the gubermint (not nationalization, just protection to ensure banking utility can continue as assets are sold to the lowest bidders) for support. All we will need then is time and we should have a great standard of living once the excess capacity of all industries reverts back to the mean.

      Two cents – the dollar is getting strong over the next few months!

  41. Chickenpookie(118083 comments)-
    February 23, 2009 at 5:48 pm

    6 handle for DOW really not that far away, too late to short? Not if the DOW is going to 5k!

    • NYUGrad(118083 comments)-
      February 23, 2009 at 5:51 pm

      Can precious metal co’s prosper if dow heads to collapse? or will all boats sink?

  42. 2nd_ave(118083 comments)-
    February 23, 2009 at 5:54 pm

    not looking good…

  43. 2nd_ave(118083 comments)-
    February 23, 2009 at 6:01 pm

    taking the five-cent hit 😉

  44. NYUGrad(118083 comments)-
    February 23, 2009 at 6:01 pm

    The revolution is at our doorstep:
    http://tinyurl.com/2pfwnq

  45. kaimu(118083 comments)-
    February 23, 2009 at 6:01 pm

    ALOHA !!

    The way Moody’s, and I am sure the S&P is no different, rates Sovereign Debt needs to be revamped.

    Somehow Ireland and Spain have Aaa ratings as well as the US and the UK! In fact most of Europe has a Aaa rating along with Australia, New Zealand and Canada!

    In essence all the countries who are DEBTOR nations and have the biggest trade deficits get the highest ratings while the countries who produce the Worlds Wealth like China and India … More DEBT better ratings … Hummm???

    Look at this link …

    LINK: http://tinyurl.com/akufls

    Its as if the most indebted countries in the World with the largest imbalances of trade, especially the USA, are being protected.

    When was the last time the credit rating agencies let us down? HUH … the entire real estate market and banking crisis were all rated AAA at on time! These rating agencies missed the boat!

    I am watching the Daily US Payroll Tax Revenues Flow and our US Treasury Daily Balance Sheet. Key to any debtor’s ability to pay is their ability to generate adequate revenues, even the USA.

    I do not trust Moody’s … Their rating system is flawed, which is not surprising based on the other embedded flaws of this financial system that have proven to be downright fraudulent at best!

    Recall that a downgrade in US and UL Sovereign Rates is a downgrade to the entire DOW components who are headquartered within US borders!

    Ratings changes can occur overnight, but more critical ratings downgrades for the USA would probably happen over the weekend!

    Or more likely after the collapse of the US Dollar is over …

    Moody’s is as clear as MUD!

    IT IS WHAT IT IS!

    MOODYS COMMENTS:
    UPDATE 2-US, UK ratings “being tested” by crisis: Moody’s
    Thu Feb 12, 2009 12:47pm EST

    Email | Print |
    Share
    | Reprints | Single Page
    [-] Text [+]
    Market News
    Bank doubts drag Wall St down
    Oil slips below $40 as U.S. stocks retreat
    IPIC to buy Nova Chemicals, relieving debt fears
    More Business & Investing News…

    (Adds market reaction on UK debt protection costs)

    By Dan Bases and Pedro da Costa

    NEW YORK, Feb 12 (Reuters) – The “AAA” credit ratings of both the United States and Great Britain are “being tested” by the strains facing the global economy, while countries such as Germany, France and Canada are proving more resistant, Moody’s Investors Services said on Thursday.

    The cost of protecting debt issued by the British government against potential default spiked to an all-time high on Thursday after Moody’s comments.

    Moody’s said it had split up “AAA” sovereign countries into three categories, depending on their various abilities to withstand the current crisis, with Ireland and to a lesser extent Spain proving the weakest of the bunch.

    The United States and the United Kingdom fell somewhere in the middle.(more)

  46. NYUGrad(118083 comments)-
    February 23, 2009 at 6:05 pm

    it will force the hands of hb&b and the govt to act. and for every action there is a reaction. we are getting closer to the end as soon as the indices can crash. lets get on with it.

    Watch s&p Nov low support level, 741 intraday low.

  47. shark_attack(118083 comments)-
    February 23, 2009 at 6:05 pm

    When one of CNBC’s on air “talents” goes postal, they create little promo’s out of the tirades?

  48. NYUGrad(118083 comments)-
    February 23, 2009 at 6:16 pm

    http://tinyurl.com/auraye

    Seems like all kind of folks who are late in paying are being bailed out.

  49. F117(118083 comments)-
    February 23, 2009 at 6:17 pm
  50. yvrapx(118083 comments)-
    February 23, 2009 at 6:18 pm

    To all you Calvinists 😉
    http://tinyurl.com/cyne64

  51. QT(118083 comments)-
    February 23, 2009 at 6:21 pm

    Look for a big rally today…

    When AAPL hits around 86 the Nasd should lead the rally up. If we rally into the close today with 2 hammers on the SPX look for the rally lasting 5-8 days.
    People will believe we put in a bottom …go short after that.

    [Just a heads ups. Trader be ware..or something like that]

  52. OldGoat(118083 comments)-
    February 23, 2009 at 6:32 pm

    Friday’s low was 752.50 (as I read the chart). If it’s gonna bounce–becoming less likely as 746 approaches–it needs to do so soon. Otherwise, another big drop is in the cards IMO. Today’s drop has been more precipitous (angle of descent) than those of the past several days. I’ve been trailing a buy stop looking to catch a bounce, but will kill order @ 746. Not advice.

    [edit #1: Trailing stop triggered; now long with stop under today’s low.]
    [edit #2: Stop moved to break-even.]
    [edit #3: Stopped out.]

  53. Ron Sen(118083 comments)-
    February 23, 2009 at 6:32 pm

    The SP500 came in with 64 percent of the stocks oversold by stochastics (14) under 20. Must be worse now.

    Intraday breadth has been a solid tell for quite awhile and its drip, drip, drip so far today.

    Seems as though as long as everyone is ‘waiting’ for the bear rally, the pot doesn’t boil.

    • NotNekkidYet(118083 comments)-
      February 23, 2009 at 6:59 pm

      There’s a bad $VIX a rising too…..

      $SPX is at critical support now and should 750 fail to hold, the next floor is in the 650 vicinity. From there is the kill shot for any still trying to force the bull argument, 450.

      Don’t fight the tape, trade it.

  54. Chickenpookie(118083 comments)-
    February 23, 2009 at 6:54 pm

    Could it be banking woes and looming trader tax keep traders sidelined until some clarity appears? Who wants to be first to test the ice?

  55. Pillzilla(118083 comments)-
    February 23, 2009 at 7:02 pm

    in at 16.75
    stop at 16.50

    Could use a good reversal of 750 area. Small nibble…..

    • 2nd_ave(118083 comments)-
      February 23, 2009 at 7:17 pm

      that was nicely timed 😉

  56. David(118083 comments)-
    February 23, 2009 at 7:19 pm

    50 shares at $48.38, just to do a little something today. If the energy sector continues to plummet tomorrow, I’ll sell the $12.50 puts on ACI.

  57. NYUGrad(118083 comments)-
    February 23, 2009 at 7:21 pm

    might be gettng close to the nov low $14.20.

    • kar(118083 comments)-
      February 23, 2009 at 7:50 pm

      The opportunities in this market is making me feel like a mosquito in a nudist colony!

  58. NYUGrad(118083 comments)-
    February 23, 2009 at 7:21 pm
    • Chickenpookie(118083 comments)-
      February 23, 2009 at 7:33 pm

      “New York Attorney General Andrew Cuomo is asking a judge to order former Merrill Lynch & Co. Chief Executive Officer John Thain to dislose names of employees who got $3.6 billion in bonuses just before the firm merged with Bank of America Corp.”

      I’d vote yes on a special executives compensation tax.

  59. NYUGrad(118083 comments)-
    February 23, 2009 at 7:30 pm
    • FranSix(118083 comments)-
      February 23, 2009 at 7:40 pm

      If you look at it straight up, the culture of enriching the few during the boom years cost the many very dearly in that time, so if the Obama administration actually manages to implement these policies, they are merely retaking what was the people’s money in the first place. Wall st. benefits mightily from all of the intervention policies so far.

      But I am wondering just what is considered to be excessive in terms of earnings, thus in need of the heavy imposition of taxes, should it be $250k or better than say $500k, or do these considerations come out of the genie co-efficient?

      • NYUGrad(118083 comments)-
        February 23, 2009 at 7:45 pm

        No idea…as i think all these “bright” ideas are floated out to see how the public receives them. no one is truly commandeering this ship. the ones who caused to to go off course are already in their escape rafts with our money.

    • BillySundance(118083 comments)-
      February 23, 2009 at 7:48 pm

      I was out to dinner with a friend recently who brought up an interesting angle regarding the U.S. social security program. She has worked supporting a number of labor organizations, helping them to build newsletters and keep their membership informed on pertinent labor issues.

      She was of the opinion that, while not perfect, social security is one of the few public programs that actually functions relatively well. She was of the opinion that the financial community was perpetrating a campaign to overstate the issues regarding social security in order to benefit their own industries through privatization of retirement accounts (that would replace the social security program).

  60. Pillzilla(118083 comments)-
    February 23, 2009 at 7:36 pm

    I am still tring to figure out why all you guys love obama so much….take from the working, give to the lazy. Sorry to go into politics.
    stop set on tna at 17.03….lock a profit allow some upside

    • Pillzilla(118083 comments)-
      February 23, 2009 at 7:40 pm

      that didnt take long ; ‘ )

  61. bobbyo(118083 comments)-
    February 23, 2009 at 7:38 pm

    What was that spike up about is Timmy speaking.

  62. Fox1(118083 comments)-
    February 23, 2009 at 7:44 pm
    • 2nd_ave(118083 comments)-
      February 23, 2009 at 7:50 pm

      That must be Plan C 😉

  63. OldGoat(118083 comments)-
    February 23, 2009 at 7:53 pm

    Under 746….let the games begin! 706 soon? 660 a bit later on? Anybody want to put some money down on 440?

    • NYUGrad(118083 comments)-
      February 23, 2009 at 7:57 pm

      I am watching for a break of 741 on the s&p. i just hope precious metals can still swim upstream.

    • Dr. Strangelove(118083 comments)-
      February 23, 2009 at 8:09 pm

      OldGoat –

      Enjoy your posts. If history repeats, we’re going way down from here according to this chart updated daily:

      http://social.stocktock.com/profiles/blogs/1937-vs

      Get your parachute on … now!

      Cheers.

      • FranSix(118083 comments)-
        February 23, 2009 at 8:18 pm

        The chart on stocktock.com is very much like those of Bob Bronson of FinancialSense.com with the same elliot wave numbers.

        The conclusion you can draw from the last boom since 2002 is that financial interests the world over attempted to stave off an earlier depression after the Nasdaq crash, only to deepen the credit problems coming with the bust in 2008.

  64. Pillzilla(118083 comments)-
    February 23, 2009 at 7:53 pm

    glad i set that stop…..ugly brutal market

  65. shark_attack(118083 comments)-
    February 23, 2009 at 7:55 pm

    The more convinced I become that equity prices are gonna go A LOT lower. There have been fortunes made shorting the market this past year. How much was made? The greatest movement that ever occurred in the history of the stock market happened in the past year or so, is still happening, and of course happened all on the short side. As I wrote earlier this support will function as a 2 way swing area. Once it becomes obvious that we are going to or have breach(ed) those levels, EVERYONE will become a seller. When that happens, the market will “clear”, falling all to ____ one day and those sellers and those buyers will exchange places in the social order.

    • teamonfuego(118083 comments)-
      February 23, 2009 at 8:01 pm

      shark – two things: (1) this hasn’t been the greatest move ever…during GD move was over 85% lower and (2) i agree that the support below SP741 is much lower…probably 600. i honestly don’t understand the valuation of the market right now b/c the earnings are probably going to be at $30 to $40/share for another 2 years. Slap a 15 p/e on that and you’re talking 450 to 600.

  66. bigwad1(118083 comments)-
    February 23, 2009 at 7:58 pm

    Berkshire down 1,600.00 today so far.
    In the last 4 trading days 9,550.00 has been shed.
    Lets bail out this ponzi scheme with TARP IV.
    Looks like the greatest, of the greatest, is following parallel to the banks in performance.
    Seems strange, Buffoon being the insurer of US government employees is having investor attrition.
    Insurance = CASH COW
    Government Insurance = GOLDEN COW with and added bonus of WINDFALL PROFITEERING

    • FranSix(118083 comments)-
      February 23, 2009 at 8:02 pm

      There is something in the American culture I find very curious, that its somehow the government’s responsibility to enrich the well connected. I have come across certain statement to this effect on this forum. Where does it say this in the constitution?

      Just sayin’

      • Pillzilla(118083 comments)-
        February 23, 2009 at 8:05 pm

        guess I have missed that sentiment. I would say that its mutually agreed for the most part here that there should be some personal accountability. Santelli had it right last week IMO

  67. teamonfuego(118083 comments)-
    February 23, 2009 at 8:03 pm

    has anyone here been tracking ANH? If so, could you share more info on what they do? Their earnings have held steady…they must be investing in long treasurys or something like that. they offer a 16% yield.

    • Pillzilla(118083 comments)-
      February 23, 2009 at 8:08 pm

      sounds like a ponzi scheme….LOL

      I jest, but I wouldn’t be suprise by anything today.

  68. NYUGrad(118083 comments)-
    February 23, 2009 at 8:15 pm

    is that you Finger?

  69. David(118083 comments)-
    February 23, 2009 at 8:18 pm

    From the headline news today:

    “the Dow Jones industrial average, down about 215 points, reached its levels of October 1997 as investors succumbed to their growing worries about a recession that has no end in sight.”

    “People left and right are throwing in the towel,” said Keith Springer, president of Capital Financial Advisory Services. “The biggest thing I see here is the incredible pessimism,” Springer said. “The government is doing a lousy job of alleviating fears.”

    Now, let’s not forget that a stock market bottom forms not when it becomes clear that the corporate earnings will start rising soon, but when it becomes clear that the WILL NOT start rising ANY TIME SOON. Nobody wants to be the fool and keep stocks when it is obvious that stocks will keep falling. Therefore, “weak hands” sell stocks AHEAD OF TIME, as soon as they realize that “the market is going a lot lower.” Since this realization is already here, I would be very surprised if the market indeed goes A LOT LOWER. I am not suggesting to go “all in now” — I am just trying to provide another point of view at today’s market…

    • KillBear(118083 comments)-
      February 23, 2009 at 8:40 pm

      IMHO, while a further sharp decline for the indices from here is not impossible, there’s no setup for new shorts. Month end mark-up, oscillators are oversold and 7:9 down days (for Toronto’s TSX). The message boards are filled with “get out now” and “gold, gold, gold” postings.

      Markets have a tendency to bottom on Tuesdays. I expect a sharp sell-off tomorrow A.M. followed by an afternoon turnaround.

      I smell a bear trap.

  70. NYUGrad(118083 comments)-
    February 23, 2009 at 8:23 pm

    S&P 745 now

  71. Chickenpookie(118083 comments)-
    February 23, 2009 at 8:23 pm

    Rumor is AIG will be reporting an ~$60B loss.

    • dberryclan(118083 comments)-
      February 23, 2009 at 8:51 pm

      oh good, only 60 billion!!!

  72. davefairtex(118083 comments)-
    February 23, 2009 at 8:26 pm

    So my question is, why is TCK doing well on a day when everything else is doing not so well? Normally TCK gets kicked around pretty hard when the overall market falls, but today it’s either flat, or up. I don’t see any fundamental news today on it.

  73. Pillzilla(118083 comments)-
    February 23, 2009 at 8:32 pm

    Anybody going stone up and place a big bet at 741.03?

    Its a long way down after that.

    PPT coming today?

  74. jmorris1950(118083 comments)-
    February 23, 2009 at 8:35 pm

    Hey Kaimu,

    I have been looking at this (nice idea, btw) but it looks like I will be required to use a 3rd party in order to actually buy/keep gold there. The PM website mentions two outfits, one in CA and one in MD. What do you do as it looks like only citizens of Australian and New Zealand can work directly with the mint. Thanks…

    • loannetter(118083 comments)-
      February 24, 2009 at 4:43 am

      Marry a New Zealander…much easier!

  75. NYUGrad(118083 comments)-
    February 23, 2009 at 8:36 pm

    it will be interesting to see which direction slw goes.

  76. sammas(118083 comments)-
    February 23, 2009 at 8:40 pm

    from page 1 (in bold font, no less):

    “Neither the Securities and Exchange Commission nor any state securities commissions has approved or disapproved of the securities offered in this prospectus, or determined if this prospectus is truthful or complete.”

    when outrage is expressed because members of congress do not even read the bills that they vote into law, keep in mind that traders buy securities of which they do not even read the prospectus. only in america!

    • guygrand(118083 comments)-
      February 23, 2009 at 8:59 pm

      What’s the connection and what is your point?

      • alberio(118083 comments)-
        February 23, 2009 at 9:11 pm

        His point is you have absolutely no idea what you are buying.

        • Chickenpookie(118083 comments)-
          February 23, 2009 at 9:38 pm

          “His point is you have absolutely no idea what you are buying.”

          This market is so rigged, you’ll loose your ass anyway. Unless you know how to navigate the tangled mass of trip wires, which are infinitely layered.

  77. Grym(118083 comments)-
    February 23, 2009 at 8:40 pm

    Chickenpookie,

    My November, 1991, letter to my congressman ended: NAFTA = Not A Fine Thing America!

    You missed one which came later. Al the H1B visas to supply imported cheaper labor for people like Bill Gates who last year appealed to congress to increase then number.

    If he can hire Ph.Ds from India at the same pay a U.S. grad student would get, why pay 6 figures for a kid to go to college?

  78. NYUGrad(118083 comments)-
    February 23, 2009 at 8:46 pm

    looks like s&p wants to show us 741 before 4pm.

  79. Bill Cara(118083 comments)-
    February 23, 2009 at 8:47 pm
  80. Grym(118083 comments)-
    February 23, 2009 at 8:47 pm
    • yvrapx(118083 comments)-
      February 24, 2009 at 1:02 am

      Hi Grym, No tips am having a difficult time reconciling the abject corruption going on. Was switching gold stocks around the past couple of weeks taking on the lower cost producers vs. the Sr’s.
      Ah, Calvinism, this is one of my faves and I heard it referred to by Don Coxe many years ago. It is useful if you believe in atonement and it appears the ‘Masters of the Universe’, in their act of atonememt are dragging the rest of us down as well. BTW I am an atheist but find religion interesting from the standpoint of how much damage it does to the human race.

      • ChrisM(118083 comments)-
        February 24, 2009 at 1:14 am

        “find religion interesting from the standpoint of how much damage it does to the human race” – One thing Marx got right.

      • Chickenpookie(118083 comments)-
        February 24, 2009 at 1:30 am

        yvrapx – I would classify myself as an agnostic, atheism is too extreme an approach even for me. After all, can you prove there is no God?

        • yvrapx(118083 comments)-
          February 24, 2009 at 3:02 pm

          CP my apologies Grym,
          The better question is can you prove there is one? Not to be disrespectful but there isn’t a religion in the world that can prove there is one. A faith based position that centers around a belief in the unbelievable is a huge stretch, although it keeps the masses coming back.
          BTW In the Washington Post Op ed piece I figured you would find some people described in it, doesn’t surprise me it was your Dad. My son will ask me what the big problem was when he is older, I can tell him it was men with a lack of principals and honor.

  81. David(118083 comments)-
    February 23, 2009 at 8:55 pm

    Looks like S&P will close exactly at 741. 🙂 Take your pick now, before the close, about what happens tomorrow…

  82. Pillzilla(118083 comments)-
    February 23, 2009 at 9:00 pm

    Didn’t have the stones to load up anything. Big move coming soon. Capital preservation seemed more fit. Close at low could be bad for open tomorrow! More panic to come IMO. Most here must feel the same as I didnt see much trading being posted.

    Any words of wisdom? Bill? Look forward to your next summary report.

    • Bill Cara(118083 comments)-
      February 23, 2009 at 11:49 pm

      Sorry for the hacker near the end of the day, but Jeff and Matt are on it.

      Pillzilla, we are just writing puts. Put buyers are trying to drive the market to zero, and the premiums they are paying to do it are ridiculously high. So, it makes a ton of sense to write those puts — give the idiots what they want, they will eventually either lose 100% of their capital or end up exercising stock that you will buy at stink bid prices.

      One of the traders had this comment today, and I agree:

      “Can you imagine Abraham Lincoln, Winston Churchill, Teddy or Franklin Roosevelt moping around, telling us our current situation is hopelessly desperate, and we all must suffer as things spiral out of control? Would this attitude define leadership? A leader needs the vision to see the path to a better future, a plan to get us there. The longer the Obama administration fails to articulate a strategy to go forward and cure what ails our financial system, the more uncertainty is created, the more difficult our road to recovery becomes. Strong leadership breeds confidence and that is exactly what is needed to drive equity prices higher.”

  83. dberryclan(118083 comments)-
    February 23, 2009 at 9:02 pm

    At this rate HB&B should get another 500 billion in funds from the gubermint

  84. dberryclan(118083 comments)-
    February 23, 2009 at 9:07 pm

    what’s a guesser to do? Watch…

  85. bobbyo(118083 comments)-
    February 23, 2009 at 9:22 pm

    Long City, Short America.

  86. Chickenpookie(118083 comments)-
    February 23, 2009 at 9:34 pm

    Terrific Timmy is going to have to cough up a bunch more taxpayer money to cover these greedy bankers…. At some point, someone should ask how much money they will need, otherwise the bleeding will go on forever. If they’re broke, who needs them, there’s plenty of other banks around, I’ll just go to the ATM like I have for the last 15+ years.

    # AIG in discussions with government on additional funds: report- Reuters
    # New U.S. stake in Citigroup may not calm doubts- Reuters
    # Regulators pledge to shore up financial system- AP

    • NYUGrad(118083 comments)-
      February 23, 2009 at 9:39 pm

      1. Back 100% of consumer funds in Citi, Wachovia, Wells, BAC, etc.
      2. Prepare Regional banks to be receivers
      3. Allow all in bucket #1 to fail
      4. Dismantle the fed
      5. Investigate the fed and hb&b
      6. back usd by gold, or something, ANYTHING other than the sweat of American’s and the unborn

      the above will never happen voluntarily will it?

  87. Lori Smyth(118083 comments)-
    February 23, 2009 at 9:34 pm

    An Israeli doctor says ‘Medicine in my country’s so advanced
    that we can
    take a kidney out of one man, put it in another, and have
    him looking for work in six weeks.’
    A German doctor says ‘That is nothing; we can take a lung
    out of one person, put it in another,
    and have him looking for work in four weeks.’A Russian doctor says ‘In my
    country,medicine is so advanced that we can take half a heart out of one
    person,put it in another, and have them both looking for work in two
    weeks.’
    The Texas doctor,not to be outdone, says ‘You guys are way behind,we
    recently took a man with no brains out of Texas,put him in the White
    House for eight years, and now half the WORLD is looking for work.’

  88. sammas(118083 comments)-
    February 23, 2009 at 9:38 pm

    from page 4, “Termination Events”:

    “The Sponsor may also direct the Trustee to terminate the Trust if the
    Commodity Futures Trading Commission, or the CFTC, determines that the Trust is a commodity pool under the Commodity Exchange Act of 1936, as amended, or the CEA.”

    from pages 14-15, http://www.gao.gov/archive/1999/gg99074.pdf

    “Although LTCM was not subject to federal banking or securities regulations, it was subject to CFTC regulation as a commodity pool operator because it had U.S. investors and traded on futures exchanges.”

  89. 2nd_ave(118083 comments)-
    February 23, 2009 at 9:41 pm

    “special Treasury issue of 30-40-50 year bonds.” That was an idea Brinker brought up yesterday.

    Can anyone spot a problem with it?

    • proudPapa(118083 comments)-
      February 23, 2009 at 10:12 pm

      problems with this plan:

      1. being a debt slave for 30 years
      2. paying off a $300K mortgage on house worth $200K
      3. people realizing 1 and 2 bail anyhow
      4. tax payer left with losses on those 30-40-50 year bonds

      • Chickenpookie(118083 comments)-
        February 23, 2009 at 10:52 pm

        If that $200k house might be worth $100k in a couple years, I won’t buy it. Would you?

        • 2nd_ave(118083 comments)-
          February 24, 2009 at 1:30 am

          “If that $200k house might be worth $100k in a couple years, I won’t buy it. Would you?”

          Depends. Let’s make it a little more realistic. Let’s say I can buy that house for 200k right now, ‘subsidized’ if you will by the Fed lowering rates to 4% fixed for 30 years. So monthly payments are 954. Two years later, the market value of the house is 150k, BUT a 30-year fixed is now 8%. A new buyer would be making monthly payments of 1100. I would be happy paying off a home I bought for 200k at 954/month, and feeling sorry for the guy who buys the home next door for 150K but has to finance it at 1100/month. Especially if renting a comparable home runs 1100/month at that time. Most people look at the monthly payment on a mortgage and compare it to the monthly rent they would pay otherwise. Many assumptions apply here, of course. Just saying it’s not all about the selling price.

          • Chickenpookie(118083 comments)-
            February 24, 2009 at 1:38 am

            2nd – “Most people look at the monthly payment on a mortgage and compare it to the monthly rent they would pay otherwise. Many assumptions apply here, of course. Just saying it’s not all about the selling price.”

            Nice try, but as long as housing prices are falling, so too must rates. This is part of the problem we are experiencing, Bernanke pulled the rug from under the feet of ARM mortgage holders when he suddenly raised rates. He should have first made an effort to convert those loans over to fixed, he made a huge mistake.

          • 2nd_ave(118083 comments)-
            February 24, 2009 at 1:43 am

            CP- “..as long as housing prices are falling, so too must rates.”

            Why? The inverse certainly isn’t true.

          • Chickenpookie(118083 comments)-
            February 24, 2009 at 1:52 am

            “Why? The inverse certainly isn’t true.”

            Because falling home prices is deflation. The fractional reserve banking model will shut down in times of substantial(prolonged) deflation, this is why the FED’s monetary policy targets an inflationary policy (aside from other insidious, dishonest reasons). Housing deflation IS substantial deflation in terms of consumer income, because we exist in a consumer driven economy.

          • 2nd_ave(118083 comments)-
            February 24, 2009 at 2:00 am

            Isn’t it possible that high home prices were simply the inevitable result of low interest (borrowing) rates? In other words, the only way some buyers can afford a 200k home is with a 30-year fixed rate of 4%. In two years, the Fed then allows rates to spike to a more natural equilibrium (let’s say 8%). In which case it drives the market value of the same home to 150k.

            In other words, which comes first- the chicken or the egg?

          • Chickenpookie(118083 comments)-
            February 24, 2009 at 3:18 am

            2nd – “In other words, the only way some buyers can afford a 200k home is with a 30-year fixed rate of 4%. In two years, the Fed then allows rates to spike to a more natural equilibrium (let’s say 8%). In which case it drives the market value of the same home to 150k.

            I do understand the point you’re making, but the situation at hand has become dire to the point of massive proportion.

            Last question first – First comes the chicken, this is where the egg came from, necessary for the proceeding chickens. In fact, the first chicken wasn’t really a chicken, but may have been a dinosaur with feathers.

            So the mortgage holder who bought a 200K home at 4% will be willing to take a 25% hit and not walk away from his mortgage causing default? What if he needs to relocate after two years, he won’t have negative equity? The buyer at 8% is probably getting a better deal buying at a lower price, the higher rate gives him a better write-off. He waited and saved two years meanwhile, so he’s got more down as well, and lower payments.

            I would rent and wait for the second deal if I thought prices would continue falling.

            Rates at 8% might be a natural equilibrium, the natural equilibrium is met when the fractional reserve system can operate without “loss”, and with “acceptable” inflation.

            Raising rates doesn’t necessarily cause home prices to fall, but large scale default certainly has. Neither does lowering rates necessarily cause home prices to rise. Home prices are based upon the demand, if the buyers are capable of making payment, systemic demand should rise. Jobless can’t pay, low wage earners probably cannot without assistance, fair wage might be able, high wage probably could. Keep in mind that as prices fall, defaults are more likely to rise just as wages fall results in same.

            Yes, high home prices were definitely a result of low rates for this bubble! In fact, many buyers overbought their homes because rates enabled overbuying. Many of these buyers thought or were told they could make payment. Great! Until their ARMS shot through the roof and job losses began to mount. Then there were another crowd, the NINJA crowd. The banking model thinking it was foolproof, couldn’t account for mortgage default or the securities ratings that were fraudulent as well. Well, mortgage brokers were hunting madly for anybody with a heartbeat, in fact Citi was frantically contracting folks as mortgage brokers. Many otherwise homeless were likely put into mortgages they simply couldn’t afford, and the entire process became a huge sham resulting in waves of defaults and forcing prices down (more sellers than buyers). The problem was greatly exacerbated by the proliferation of ARM’s and finally, Bernanke raising rates over night for all impractical purposes.

            I have never seen home prices fall appreciably for any period of time on such scale, neither had the financial innovators who conjured up the scheme of bundling masses of mortgages into CDO’s and peddling them across the planet. The model didn’t account for massively fraudulent home sales financing to people who hadn’t means to pay. There was huge demand, so prices jumped sky high.

            Wages needed to catch up, or rates should’ve stayed low or moved lower. Inflation must be tightly controlled and reflected across the board, not in bubbles. Perhaps monetizing would be a great leveler, as those without cash would only have to pay higher prices and their wages should rise accordingly(common folk only are allowed the necessities), where those with cash would be forced to convert to hard assets. If a homeowner looses more than his principle (I would guess maybe even 50% of his principle in some cases) or cannot make his payment, he might decide to walk away. Why would he continue holding a bag when he could simply walk away or sell and rent?

            A combination delicately balanced of lower rates, higher wages, more jobs, monetary inflation might be exceedingly difficult to implement, and very time consuming as well. It’s way too late in the game and the potential for failure too great to monkey around on a shoestring budget, the housing slide and job losses must somehow be stopped in it’s tracks. Obviously the banking system is now overly sensitive to financing assets that are rapidly depreciating.

          • 2nd_ave(118083 comments)-
            February 24, 2009 at 3:30 am

            “In fact, the first chicken wasn’t really a chicken, but may have been a dinosaur with feathers.”

            CP- We can continue the conversation re home prices later. But I like your response to the larger philosophical question. 😉

          • David(118083 comments)-
            February 24, 2009 at 4:38 am

            Thanks for a thoughtful writeup regarding home prices, CP! I have copied it into a file, which I will keep re-reading until I can repeat the same eloquent argument to my friends.

          • bobbyo(118083 comments)-
            February 24, 2009 at 2:10 am

            “Most people look at the monthly payment on a mortgage and compare it to the monthly rent they would pay otherwise. Many assumptions apply here, of course. Just saying it’s not all about the selling price.”

            This is the reason for so many foreclosures. Ignorant people get enticed by loan officers (don’t mean you loan letter)by the low monthly payments from ARMs and interest only payment loans. I know that the borrowers did not understand interest and what they were signing and probably did not care. ” I’m buying a house.” It is really the fiduciary responsibility of the loan broker and the lender to make it clear. The borrower did not have billboards, tv commercials and web ads proclaiming the easy credit.

            Of coarse these home loans are getting blamed for the credit crisis which is not true. It is what was done with these loans by Wall street that has caused the problem.
            Bob

            PS. What ever happened to those lending tree comercials?

          • loannetter(118083 comments)-
            February 24, 2009 at 5:20 am

            Mortgages were invented to help people get into homes with less down payment. Not unlike indentured servitude. The longer you pay the longer you stay! We have lots of new offers daily for ways to use your equity to get rich (interest only and moving debt around to avoid average daily balance) but the smart folks pay more not less and sleep better than the rest of us. So I’ve heard!

          • Chickenpookie(118083 comments)-
            February 24, 2009 at 3:50 am

            “Let’s make it a little more realistic. Let’s say I can buy that house for 200k right now, ‘subsidized’ if you will by the Fed lowering rates to 4% fixed for 30 years. So monthly payments are 954. Two years later, the market value of the house is 150k, BUT a 30-year fixed is now 8%. A new buyer would be making monthly payments of 1100. I would be happy paying off a home I bought for 200k at 954/month, and feeling sorry for the guy who buys the home next door for 150K but has to finance it at 1100/month.”

            Shopping in asia, you are likely to notice where a vendor will post two prices for his wears, one lower than the other, but with a red line through the low price, indicating the price was just marked up. If you enquire and show interest in said product, then request the marked out price, the vendor, in my experience, will sell the item for the marked out (original) price. It is this pricing psychology he uses to move more product (Yodobashi Camera).

  90. 2nd_ave(118083 comments)-
    February 23, 2009 at 9:47 pm

    (a) TARP 1.0? No.
    (b) The $75b mortgage lifeline? No.
    (c) The $757b economic stimulus plan? No.
    (d) Nationalization of banks? No.
    (e) A 3.5% fixed rate for mortgages? Yes.

    • NYUGrad(118083 comments)-
      February 23, 2009 at 9:49 pm

      Add
      (f) no more income taxes

      • BillySundance(118083 comments)-
        February 23, 2009 at 9:59 pm

        and

        g) reduction in property taxes (and overhaul of the property tax system, which is built on the flawed assumption of consistent increases in value)

  91. BillySundance(118083 comments)-
    February 23, 2009 at 10:08 pm

    FWIW……stock is up AH after JPM slashes dividend. News stories suggesting that JPM might eventually be the first to repay the TARP money.

  92. NYUGrad(118083 comments)-
    February 23, 2009 at 10:21 pm

    ? it keeps sending me to another site

    • Chickenpookie(118083 comments)-
      February 23, 2009 at 10:35 pm

      Yes, takes me to [removed]

    • bigwad1(118083 comments)-
      February 23, 2009 at 11:04 pm

      Sounds like a browser hijacker got you!
      Do a registry check or run MalwareBytes or any other protection software you have. Spybot? Norton? McAfee?

      • SiO2(118083 comments)-
        February 23, 2009 at 11:12 pm

        I am fine (love Scotty on Patrol!) but anyone who loaded this site recently should run their anti-virusses.

        ych is correct, the iframe is there near the end of the main site html. I found this:

        “I know 6 forums hacked via this exact script. I dont know how they are able to add the iFrame without logging into the server. They’ve changed passwords, and everything. I know that the server was not compromised via root, YET they are being continuously hacked. Turns out its a SQL injection of sort.

        http://forum.joomla.org/viewtopic.php?p=1565780

  93. Proc(118083 comments)-
    February 23, 2009 at 10:32 pm

    The pitchfork guy has been pretty accurate since January , and some very funny postings in the thread

    http://www.elitetrader.com/vb/showthread.php?s=&th

  94. SiO2(118083 comments)-
    February 23, 2009 at 10:48 pm

    Please check your systems. My scotty reported this:

    Threats found: 1
    Here is a complete list:

    Threat Name: Backdoor.Trojan
    File name: C:\WINDOWS\system32\mrxprs.dll
    Signature (MD5): e84bd5eb419f0227eaf611eb5255d275
    Location: [removed]

    • ych(118083 comments)-
      February 23, 2009 at 11:12 pm

      I run NoScript Addon on Firefox and the addon shows that the site wants to run a JavaScript from invbiis.cn.

      Looking at the page source, looks like there is an iframe that wants to load
      [removed]

      I didn’t want to go to that site and find out if the trojan and the JavaScripts are related. I just can’t imagine why Bill’s site would want to run a script from China. So maybe Bill’s tech people can chime in.

      • korvus(118083 comments)-
        February 23, 2009 at 11:25 pm

        We do have an issue. I removed that iframe, but until I get some better information on how it got there, I can’t assure it won’t come back. I’ll let people know when I get some more information. Sorry for the inconvenience!

        • Vadym Graifer(118083 comments)-
          February 23, 2009 at 11:35 pm

          korvus,

          just in case this is the same browser hijack I run into a few weeks ago:

          – run Malwarebytes’ Anti-Malware on your computer;
          – change FTP password;
          – find .htaccess file in the root directory on the server that redirects the browser to a new site. In case it’s some other file, check the root for anything you didn’t put there.

          Good luck

          • ChrisM(118083 comments)-
            February 24, 2009 at 12:39 am

            You guys are probably way ahead of me on this, but I found this on wikipedia:

            IFrames have been implicated in many malicious code attacks, due to a series of common vulnerabilities. This was evident in many 2007 web based threats, notably the so-called Italian Job of June, 2007.[1] An IFrame can be planted on an unsuspecting legitimate website, leading the casual viewer into an infection threat. This may happen when a site is cracked, or more easily, when a site forwards results of local searches to global search engines. On such a site, the cracker only needs to perform a search that includes a malicious IFrame; a user who clicks the search result in the global search engine will be infected.[2]

          • Chickenpookie(118083 comments)-
            February 24, 2009 at 1:21 am

            I hope being redirected to who knows what website involuntarily, I didn’t pick up some kind of spyware or trojan viris. This is why I avoid websites with scripts that snoop and can take control of my machine from me.

            Good Luck!

          • NYUGrad(118083 comments)-
            February 24, 2009 at 1:26 am

            I dont have the problem anymore. i ran several spyware/virus scans, found all and fixed, and rebooted.

          • Chickenpookie(118083 comments)-
            February 24, 2009 at 1:44 am

            NYUGrad – “I dont have the problem anymore.”

            I don’t have any problems as far as I know either, but that doesn’t mean there aren’t resident viruses remaining. Did you find any malware?

          • NYUGrad(118083 comments)-
            February 24, 2009 at 1:53 am

            I did. but i cannot pinpoint if it came from here or elsewhere. sorry i can’t be of more help.

          • korvus(118083 comments)-
            February 24, 2009 at 4:07 am

            Vad,

            Thanks for the suggestions. I have some ideas as to what happened, but the nature of this kind of thing is that I may never know for sure… The server has been locked down, however, and I am double checking any computers I use just to be safe.

            Jeff

          • yvrapx(118083 comments)-
            February 24, 2009 at 4:42 am

            Hey Jeff,
            Am wondering if this would affect a Mac? It sounds like an attack on windows, just curious.

          • korvus(118083 comments)-
            February 24, 2009 at 5:33 am

            I didn’t actually go to the site, so I can’t say for sure. I will say that I suspect it was exploiting a bug found in PDFs a few days ago, and Adobe Reader for any platform could be vulnerable. So I’d suggest virus scans regardless of your platform, though Macs would seem to be less likely to be targeted.

          • SiO2(118083 comments)-
            February 24, 2009 at 1:32 pm

            This attack (changing a hosted website) was a criminal activity. Whoever did this should be tracked down by authorities.

            The thing was stopped on my computer by Scotty, the little dog that patrols your computer (winpatrol), soon after I loaded the CaraCommunity page. Link below, all free. It warns you and asks you before anything is added to your system.

            http://www.winpatrol.com/

            No affiliation with them, just a happy user.

    • loannetter(118083 comments)-
      February 24, 2009 at 4:19 am

      I got this one today: Trojanhorse Sheur2QJB 134.5 KB
      My AVB isolated it. Were there several attacks?

      • korvus(118083 comments)-
        February 24, 2009 at 4:46 am

        I believe there was only one attack, but A) the malicious site could have sent different things to different people and B) different antivirus vendors use different names for the same virus (which is horribly confusing).

  95. MoKat(118083 comments)-
    February 23, 2009 at 11:30 pm

    We have heard and read billions of words about bad debt over the last 12 months. I am growing weary of the subject but unfortunately there is much more to come.

    But nary a word about income. Why? If income would have increased in proportion with inflation, conditions would be much different today.

    According to government stats, median income increased from $41,318 in 1970 to $50,811 in 2006 (adj.2008 dollars) That’s an average increase of 7/10ths of one per cent per year for 36 years. If adjusted for real inflation and not inflation as stated by the government, the median income is lower than it was 36 years ago. Bye bye.. American pie.

    The Powerz that be engaged in global wage arbitrage during this period. Owners of capital assets and technology, enabled by financing from Wall Street banks and investment firms, slowly moved the US manufacturing base offshore to take advantage of extremely low wages in various countries, in the name of profit growth and new markets to create and exploit. Easy credit was offered to the American consumer which served to mask the lack of income growth and created millions of debt slaves in the process. HBB got to greedy in the last 5 years and things are now out of control.

    If the government’s tab for this crisis is $3 trillion, $25k could have been sent to each taxpayer… that could have provided a real stimulus. Instead our tax money has been given to those who destroyed our productive capacity and defrauded millions of people across the world with phony financial instruments, and enslaved millions within our country by extending debt without scrutiny at rates which would make a loan shark blush.

    Why didn’t our political leaders focus on the income side of the problem instead of the debt side? Because they are whores, bought and paid for by the corporate elite. Like Bill said of Pelosi, Reid,etc. I wouldn’t even let them in my house. Ditto for me.

    Who ever told the joke about Geithner last seen driving a white Bronco heading down the expressway….good one !!

    • Bill Cara(118083 comments)-
      February 24, 2009 at 12:02 am

      MoKat, the point I was making about certain politicians not being invited to my home is that I wouldn’t associate with people who are not straight-shooters. It could be people of either Party too. If all these politicians want to do is cover up for what’s really going on, then I’d feel really uncomfortable telling them to their faces in my home — which I would — and I’m not about to have outsiders make me feel uncomfortable in my own home. I would go to a public meeting and tell them, but that’s only going to make me feel better because they are not going to change. “Change” — the most abused word in our vocabulary. I guess it means something different, depending on who you are. As the expression goes, “put up or shut up”. I see the President has set up all these talking summits — that’s something he obviously excels at. How about action?

    • loannetter(118083 comments)-
      February 24, 2009 at 5:03 am

      You hit the nail on the head: “the median income is lower than it was 36 years ago.” Our post industrial strategists have found ways to SCARE THE BEJEEZUS out of people leaving college into taking less for their first offer of work because they are told there are better brains in India willing to work for pennies on the dollar. That works until the folks in Inda get wise so it’s off to Haiti or Serbia for cheaper (more desparate) minds. Are we feeding the frenzy with our quest for p/e versus a more sustainable enterprise? Guess that would be boring.

  96. EDC(118083 comments)-
    February 23, 2009 at 11:32 pm

    They could issue 1% mortgages and IT WON’T MATTER!!

    BB gun shooting at a fighter jet (not even an elephant).
    Spending and to many loans (pulling demand from the future, which is why we have excess capacity) got us into this mess…
    Spending or welfare subisdies on loans will not get us out of this mess… all a natural cycle folks, let the debt default or be paid back.

    Oh – I change my stance on Bank Nationalization. It is a very bad idea. My mistake for thinking that would be a good thing.
    LET AIG FAIL and remove support from the money centers till they throw in the towel, lets see how well capitalized they really are!

  97. David(118083 comments)-
    February 24, 2009 at 12:02 am
    • teamonfuego(118083 comments)-
      February 24, 2009 at 12:53 am

      David – maybe i shouldn’t be asking you this but with so much dilution going on, how can one possibly expect earnings to rise significantly on a per share basis “in the not-so-distant future”? Also, what guarantee is there that without lending being anywhere in the vicinity of what it was back in the day (ok, 3 years ago) the earnings will be anywhere near what they were?

      I think these are valid questions to ask ourselves. While I agree that we shouldn’t slap a 8 to 10 p/e on the earnings per share for the S&P 500, we should also not just blindly ignore p/e ratios. The market tends to be pretty darned accurate in forecasting future earnings. I mean, how many times did we hear that everyone was being irrational when they sold BAC down to $19, AIG down to $17, etc etc? These companies are now huge black holes with bottomless pits.

      • David(118083 comments)-
        February 24, 2009 at 1:13 am

        “Also, what guarantee is there that without lending being anywhere in the vicinity of what it was back in the day (ok, 3 years ago) the earnings will be anywhere near what they were?”

        teamonfuego, I fully agree with this observation, and I don’t think the S&P 500 earnings will return to where they were in 2007 for at least several years. As for the banking sector, it will obviously take MUCH longer for the earnings to return to where they were in 2007.

        “with so much dilution going on, how can one possibly expect earnings to rise significantly on a per share basis “in the not-so-distant future”?

        That depends on how one defines “significantly” and “the not-so-distant future.” 🙂 I purposefully avoided saying “they will return to the previous levels” — I just said significantly. After falling by a factor of 3, wouldn’t a 50% rise be significant in percentage terms? I just wanted to relate John Hussman’s observations that year-over-year changes in earnings are more volatile than historic stock prices (which are supposed to look many years into the future).

        • teamonfuego(118083 comments)-
          February 24, 2009 at 1:55 am

          I think a 50% rise is definitely possible…however, in normal cycle lows the p/e tends to bottom out around 10 (sometimes lower sometimes higher). So do a 50% bounce off $30 to $40/share then we’re talking $45 to $60. I think applying a 10 times multiple on that would be reasonable. That still gets us to 450 to 600 in the S&P 500.

          Anyway, rather than struggle over this guessing game, I think the best way to manage our long term money is to only buy the SPY when the S&P 500 goes 2-3% above its 200 DMA and sell when it goes 2-3% below it. This is what I’ve been preaching to myself in my 401k and aside from trying to time it once back in October, I’ve managed to escape fairly unscathed in my 401k using this strategy. Sure, I’ll miss the bounce off the bottom, but where exactly is that bottom? (Can’t say the same about my ST trading account…)

          If everyone did this we would not only save ourselves lots of commissions, but we would probably enjoy life a little more 🙂

  98. mntinhi(118083 comments)-
    February 24, 2009 at 12:05 am

    Does anybody know where were at in this fraud against America. Are we at the beginning of the money give away, the middle, or the end. I don’t think anyone really knows. I would say lower the interest rate for home mortages to 2.5% (for everyone) about the same as the 10 year t-bill. Extend the loans to 40 or 50 years. IF the people getting a 2.5% loan for 40 years can’t make it their out. If the banks can’t make it they have to be disolved. Break them up into little banks, let the homes go on the market and when they get low enough they will sell. A lot of bankers might get hurt for there dumb decisions but it was their decisions that got them here. NO more give aways. The give aways aren’t working the currency is at risk of collapsing. I have the sick feeling that we will throw 10 trillion dollars at this problem and it still will do nothing for our economy.

    • 2nd_ave(118083 comments)-
      February 24, 2009 at 12:39 am

      (a) Shareholders. I’m OK with that.
      (b) Bond holders. I’m OK with that.
      (c) Now, we hear a lot about the “too big to fail” argument. Does anyone have a link to an explanation (understandable to J6P, of course) for why they’re too big to fail? Because to me, it sounds suspiciously like the argument the Athletic Director uses when he’s explaining why Junior can not fail. There probably is a good case to be made, but referring to the “collapse of the global economy” doesn’t quite cut it. I don’t think the failure of the world’s banking giants would collapse the world economy (and maybe most of us would spontaneously create our own ‘resilient communitites.’) I think it WOULD collapse the foundations of the financial world as we know it, but that would affect only 1% of the world’s population. The other 99% would continue doing what they do, and maybe even celebrate at the end of the day.

    • Chickenpookie(118083 comments)-
      February 24, 2009 at 1:01 am

      mtnhi – Yes, lower rates would help stop the slide through reversal of flight from real estate. There will still be a lag period prior to reversal, and the longer it takes the administration, the worse the damage will become (exponentially?). They must take quick and effective action in more ways than this though, already banks have taken losses so large it will be impossible for them to recover. The damage has seeped out into and has been destroying the economy through seizure of money flow. It may already be too late to avoid unrecoverable losses, the recovery from here (if recovery is possible) will take a very long time. Note that the current decline has been much steeper than the decline of the GD and on much greater scale, hopefully the inverse might be possible, and my greatest fear is it may not.

      Unfortunately, the strategy presented by the administration does not appear holistic or systemic, and my feeling is the magnitude of the current action plan is woefully small in terms of GDP. They still don’t get it, we knew this from the beginning of the election when they weren’t discussing economic issues while telling us there were no problems in banking. Meanwhile record foreclosures were mounting. They must have the shortest memories in history.

  99. kaimu(118083 comments)-
    February 24, 2009 at 12:37 am

    ALOHA !!

    This is the ONLY guy in Washington DC I would be proud to stay a week or two at my nursery. He’s the ONLY guy virtually in the entire World of politics that is SINGING MY SONG!

    LINK: http://bankimplode.com/blog/2009/02/23/ron-paul-an

    • teamonfuego(118083 comments)-
      February 24, 2009 at 1:06 am

      I totally agree Kaimu. It’s hard to see how a person like Ron Paul would ever make it past the special interest groups in our country and get all of the things done that need to be done to fix our situation.

  100. 2nd_ave(118083 comments)-
    February 24, 2009 at 1:05 am

    David- Just letting you know that as of market close today, I cashed out my remaining positions (all metals) in the trading account. It’s as if a series of ‘seven outs’ has emptied the table, and in most cases it’s best to come back another time. I’m going to grab a beer and watch from the sidelines.

    • Mark Barry(118083 comments)-
      February 24, 2009 at 3:01 am

      2nd- “I’m going to grab a beer and watch from the sidelines.”…at the open? Reminds me of one of the best lines from the movie Mr. Mom.
      Jack ( Micheal Keaton ) pretending to work on his house in the morning when his wife’s boss Ron (Martin Mull) walks in…
      Jack; “Can I get you a beer Ron?”
      Ron; “It’s 8:00 in the morning.”
      Jack (thinking);”…Scotch?”
      Best

      • 2nd_ave(118083 comments)-
        February 24, 2009 at 3:22 am

        Mark- LOL…you know the gaming tables, so you know the rules. One indulges only on the sidelines, or when pretending to play 😉

  101. vinod(118083 comments)-
    February 24, 2009 at 1:50 am
  102. kilbo816(118083 comments)-
    February 24, 2009 at 2:29 am

    Think of how many individual and company taxes it takes to give away a billion dollars. How can we continue to throw money away, a billion here and a billion there, trying to buy our way in and take care of every world problem. We desperately need to address our own problems.

    This has been going on all my life, why stop now, even if we’ve been broke for years. Ron Paul and Kaimu are so right, empire on a credit card.

    “The United States plans to offer more than $900 million to help rebuild Gaza after Israel’s invasion and to strengthen the Western-backed Palestinian Authority, U.S. officials said on Monday.”

    http://tinyurl.com/c4qoec

    • 2nd_ave(118083 comments)-
      February 24, 2009 at 3:14 am

      Running one’s household (which we can all identify with) versus running a country (which most of us can’t) can be compared to managing your own business versus managing a corporation. It’s easy to spend your own money wisely, and sometimes that means making sacrifices (I can see riding a bike to work, buying a used car, or turning down the thermostat). Whereas it’s easy to sacrifice other people’s money in pursuit of one’s own goals (giving the nod to the company jet, the decorated office, or the lavish bonuses is easy when it’s not your money). I’m not necessarily saying spending 900m to help rebuild Gaza or 757b to help people stay employed are bad ideas. But I know if it was my household that was in crisis, I’d be telling my neighbor he’s going to have to wait if he wants help paying for an adjoining fence, and my kids they need to work or take out loans to finish college. I certainly wouldn’t be borrowing from my 401(k) or taking out a loan against my home.

  103. jock(118083 comments)-
    February 24, 2009 at 2:46 am

    On a webinar tonight, almost everywhere Alex looked (indices, individual stocks mentioned, such as GE, AVY, CAT, etc.) was MACD-H looking soon to finalize a bullish divergence and to turn from red (no can buy) to blue (can buy) on both weekly and daily charts.

    New Highs-new lows index looking to touch -4000, which has in past signified a rally of at least a couple of months. I was struck by how consistent wathe tone of “expecting a turn soon”.

    No guarantees, DYODD

    • Chickenpookie(118083 comments)-
      February 24, 2009 at 3:29 am

      “On a webinar tonight, almost everywhere Alex looked (indices, individual stocks mentioned, such as GE, AVY, CAT, etc.) was MACD-H looking soon to finalize a bullish divergence and to turn from red (no can buy) to blue (can buy) on both weekly and daily charts.”

      Boy how I wish I had a dime for every time I’ve read the word Bull or Bullish.

  104. OldGoat(118083 comments)-
    February 24, 2009 at 4:28 am

    In addition to a master password feature–a critical missing item–it’d be nice if chrome had functionality such as that provided by FireFox add-ons such as those I use daily: Adblock-Plus, Back to Top, CustomizeGoogle, DownloadThemAll!, Fasterfox, Flashblock, Gmail Space, IE Tab, NoScript, QuickJava, ReloadEvery, and others. These virtually eliminate ads and let me jump to the top or bottom of any page with one click, speed up file downloads, prefetch linked web pages, use my gmail account as a multi-gigabyte online file storage area, reload pages automatically every so many (5, 10, 30, 60, etc.) seconds [very handy for twitter], and so on. Chrome looks promising, but it’s not yet a competitive product, at least for my purposes. But then, “to each his own.” ~OG

  105. korvus(118083 comments)-
    February 24, 2009 at 4:32 am

    For those just tuning in, it looks like someone was able to modify this site so that for a little while it was redirecting people to a malicious website. I apologize for any problems this has caused, and I’ve done what I can do lock things down. That said, I suggest everyone run a virus scan. If you don’t have a virus scanner, here’s a free one that I’ve heard is pretty good: http://avast.com/eng/avast_4_home.html

    I think everything is under control now. Please let me know if there are any more problems, and if you have questions feel free to contact me. Thanks, and once again, I apologize for this problem.

    Jeff

    • Quasi(118083 comments)-
      February 24, 2009 at 2:11 pm

      Jeff,

      Yes my AVG anti virus picked it up earlier tonight when I opened the site. Also ran Malwarebytes but didn’t pick upanything.

      AVG picked it up as follows;

      Trojan horse SHeur2.QJB C:\Documents and Settings\Quasi\Local Settings \Temp\Temporary Internet Files \Content.IE5\63MVU1QV\load[1]/exe

      Trojan horse SHeur2.QJB C:\WINDOWS\system32\~.exe

      I also received a “contact the author E-mail” from “Alchemist”, which contained a link to the same virus site, jpg of the email attached, don’t want to post the link again here. Don’t know if he was trying to warn everyone or propagate the virus.

      hope this helps you figure this out.

      Edit: I emailed Alchemist and he was just trying to warn site admin of the problem, sorry for the confusion. Korvus I think there should be a direct link to “contact the webmaster” or “Site Admin”.

  106. EDC(118083 comments)-
    February 24, 2009 at 4:38 am

    If you were to refi today at 4% loan, all we are doing is pulling demand from the future to allow you to believe you will keep the home. If you have equity and want a 4% loan and can actually qualify for the loan – GET THE LOAN! no brainer…

    The problem is this… When the price falls to 150k (deflationary) and borrower costs are 8% (not because of inflation but because of risk, NOT INFLATION) which is also deflationary. Those would be borrowers already refinanced their homes or bought. Aggregate demand will be lower because of price and it will be lower due to the fact that there will be fewer jobs, and a smaler pool of borrowers will have the 20% down payment plus six months reserves.

    CP – hit the nail on the head in my opinion (not that my opinion matters at all) wages are to low where housing prices are currently. Either prices need to come straight the bleep down or wages need to go up? Which one do you believe the market will allow to happen first? I’ll bet the farm on housing going down. With out a doubt.

    Now we are about to experience another HUGE PROBLEM with housing. Since “investors” (I call them speculators still) believe the nonsense that their agents telling them that now is a great time to buy, we have a true investor bubble in the making and there is an influx of supply of rental homes entering the market. Guess what? Yup rental prices are about to go down.
    Soon the FED/FRAUD won’t be able to hide deflation as the Rent Equivalent part of the CPI calculation will finally go down.

    GOLD – will top any day now and IMO is going to make a massive correction soon. To many buyers already all in. Especially when I hear “street advisors” recommending it and believe it will go to 1500. Add GS into that category and we have what I observe to be a top.

  107. NYUGrad(118083 comments)-
    February 24, 2009 at 5:01 am

    I dont own any. its one of the indicators i look at for silver wheaton.

    GG seems overbought & losing steam. Can gold and other prec metals defy gravity and keep going up or is it time for a pull back?

    http://tinyurl.com/buzvyy

    • dberryclan(118083 comments)-
      February 24, 2009 at 5:22 am

      i’d love to see the gold miners pull back 15%. If Gold held above 950 possibly a good place to enter the miners….i have been in and out of GG leaps twice…..15-50% gains…….when the option climbs 50% my first inclination is to hold for more. But the resistance in the stocks price action is clearly seen and if I don’t pull the trigger, I loose % gains …….the foolishness of greed still gets me at times……letting the chart say what it wants to and not what I wish it to is a learning process for me 🙂

  108. EDC(118083 comments)-
    February 24, 2009 at 5:13 am

    down 6 days in a row? can it be seven? 99% odds say NO. 1% say yes, well if history is our guide.

    Tomorrow we will soon tell….

  109. dberryclan(118083 comments)-
    February 24, 2009 at 5:13 am

    I am entertaining the thought of liquidating my two houses and moving myself and my family overseas. Is there a place in Asia where my capital goes much farther than USA and Americans are welcomed?. How about South America?

    • jock(118083 comments)-
      February 24, 2009 at 7:15 am

      The Americas have a couple of great advantages vrs. Asia, IMHO:

      1. no jetlag going or coming
      2. western culture for the most part
      3. more developed (vrs. less-developed Asia)

      IF you’re looking for a place to live, these factors may well matter.

      You might look into Costa Rica, Chile, or Uruguay. Some like Belize, I don’t know it, but it is relatively underdeveloped, and lives in the shadow of Guatemala, and has a hotter climate than those mentioned above.

      The most FUN country in the the Americas, IMHO, is Brazil, but it’s a bit more “out there” than Costa Rica or Chile or Uruguay …

      FWIW

      • everyman(118083 comments)-
        February 24, 2009 at 1:21 pm

        Or the often overlooked … Panama.

        Costa Rica is another one of those “popular for being marketed” products. Once you arrive, you find they really don’t like you very much. There are always two price lists, one for the locals and one much more expensive one for the foreigners. In an earlier economic crunch, they blamed the downturn on the foreign residents and revoked their residence permits thus worsening the crisis. Panama law treats foreigners and locals alike. The only places where you aren’t equal is in respect of voting and using the state health services.

        • jock(118083 comments)-
          February 24, 2009 at 4:31 pm

          everyman, I like Panama too, although a rather hotter climate, and I understand Panama City traffic has become rather crazy.

          One great advantage: Minister of Tourism is the great salsero Ruben Blades, who has written some of the most beautiful and haunting music ever.

  110. kilbo816(118083 comments)-
    February 24, 2009 at 5:18 am

    Not everyone who is in trouble started out intending to game the system.
    In Florida, the story was all about the baby boomers were soon going begin retiring in large numbers and housing prices would continue to rise. As prices rose people felt they would be priced out forever if they didn’t buy. It didn’t hurt that housing was seen as a sure bet to increase wealth.

    Contractors and every industry associated with housing purchased because they had been making good money for several years and felt the payments were managable. Then rates increased and sales stopped within a few months. Now this sizable group are unemployed and have been for over a year.

    There was greed in the population too as evidenced by people buying to flip.

    I place the blame on too much easy money acting like gasoline on a fire.

    From what I gather, government pressured the banks to expanded homeownership for certain groups and allowed banks to reduce their underwriting critera which applied to all. The banks were ready to go along because of the crazy fees they charged for these loans. I saw one that had 16K in fees on a 300k loan.

    Just my 2 cents worth

    • dberryclan(118083 comments)-
      February 24, 2009 at 5:35 am

      It has taken several years for this housing bubble to wind up through all the different players. Now that the mess is apparent and being felt, it is still obvious by the presidents comments on bringing mortgage relief that we have not learned yet how to avoid returning to our own vomit. WE WILL LEARN but it will be through MAX PAIN.

      The stories trickled out today how the high and mighty Harvard endowment fund was mismanaged. How can experts be so incompetent? They seem supervised like a hairdressing union in a mid-sized town. Go to any corner salon and your wife can come home with a horid, different hair style each week. In my profession there are many incompetent medical professionals. But the carnage at the hands of the Financial Watch Dogs affects the whole globe!!

      it ain’t working any more

      maybe people like Bill will gain influence when the pot boils over?

  111. David(118083 comments)-
    February 24, 2009 at 6:09 am

    are gaining steam. Maybe tomorrow a gap up opening will result in a real rally, unlike today?

  112. David(118083 comments)-
    February 24, 2009 at 6:45 am

    Placing a buy stop limit order on ACI: stop at $12.6, limit at $13, for 300 shares.

    Placing buy to cover orders for 50 shares of ERY at $40 and for 100 shares of FAZ at $45.

  113. kaimu(118083 comments)-
    February 24, 2009 at 8:36 am

    ALOHA !!

    I thought I would recap some of the important points from the DAILY US TREASURY STATEMENT as posted on the FMS website for Feb 20, 2009.

    First of all did anyone recall that on Feb 17th the Statutory Debt Limit was raised yet again by CONgress to $12.104trillion USD? Back in Feb 2006 the Debt Limit was sitting at $8.18trillion USD, so in three years it has been raised by nearly $4trilUSD, averaging $1.308tril per year! That’s even before TARP I or TARP II or Stimulus I and Stimulus II!

    WHAT GOOD IS A LIMIT IF IT IS ALWAYS BEING RAISED? HUH? Anybody over at the US TREASURY want to explain that?

    FEB 20, 2009
    On Feb 20, 2009 the US TREASURY was in the hole by $130.7bil USD for FY 2009.

    On Feb 20th we spent $385milUSD on TARP and for the month of Feb so far we have spent $5.136bilUSD on TARP and for the FY 2009 so far we have spent $300,050bilUSD on TARP.

    How many months are we into FY 2009? FIVE! So we are spending around $2bilUSD per day on just TARP! Never mind any of the other expenses for the EMPIRE!

    I would ask GEITHNER to explain these two line items that occur every day on his DAILY STATEMENT …

    1-Unclassified withdrawals = $219bil
    2-Other withdrawals = $813bil

    TOTAL = $1.0318tril USD

    I see no “notes” on those two line items that would clarify exactly what those funds are being withdrawn for. That’s a LOT of money to have no NOTES on! In fact if I ran my business like that the IRS would shut me down, but then again I DO pay my taxes unlike our new Tres Sec!

    SS MED FOOD
    Totals for FY 2009 for Social Security, Medicare, Medicaid, Food and Temp Asst. totals $515.5bilUSD, that’s $103.1bilUSD per month or $3.43bilUSD per day.

    So between just TARP and SS/MED we are spending around $5.5bil USD per day! Not including other EMPIRE costs like Defense and the interest on the DEBT and Education and Veterans and Unemployment … and on and on!

    In 1980 when GOLD was at its zenith of $850per ounce the Carter administration had racked up a total US NATIONAL DEBT of $930bilUSD. So between the two line items entitled “Unclassified withdrawals” and “Other withdrawals”(so much for transparency)we have already spent more than the entire National Debt in 1980 and we are only five months into FY 2009!

    Does Moody’s or S&P look at this DAILY US TREASURY STATEMENT? C’mon, even HANK PAULSON our ex-Tres Sec said in his last report FY 2009 REPORT ON THE STATE OF THE US GOVERNMENT that the US Treasury is not sustainable! What if GE or MSFT came out with a report that said their business was not sustainable? Would Moody’s and S&P do anything? Would stockholders sell shares? Would the DOW go down? What about CEO bonuses? HA!!

    So can anyone explain why the POG should not be at least at the inflation adjusted 1980 price, which is around $2500 per ounce?

    Can I please see a GOLD BAR LIST from Fort Knox … oh and please include the serial numbers? Thanks TIM!

    When can WE THE PEOPLE visit OUR GOLD?

    These are some desperate times and I just want to make sure that at least 16,000 tons are still there!

  114. Ron Sen(118083 comments)-
    February 24, 2009 at 11:36 am

    http://ronsen.blogspot.com/2009/02/another-great-n

    # 71 percent of the 100 MUST series made 15 period lows yesterday
    # 74 percent of SPX stocks are oversold by stochastics
    # The SPY is down over 17 percent for the year.
    # The Worden T2108 (stocks over the 40 period average) is under 10 percent

  115. Lori Smyth(118083 comments)-
    February 24, 2009 at 12:58 pm

    Who do we suppose is attempting this system sabotage??? Sometimes the truth hurts but it has to be spoken. Keep talking Bill – we students of the markets are all listening intently.

  116. Grym(118083 comments)-
    February 24, 2009 at 1:13 pm
  117. Bull Hunter(118083 comments)-
    February 24, 2009 at 1:18 pm

    Good morning.

    Upgrades:

    CCL – to Outperform @ Credit Suisse. Price Target $30
    QCOM – to Buy @ Argus

    Downgrade:

    CHRW – to Underperform @ Wachovia ( and they wrote the book on underperforming ;^) )

    New:

    SBUX – Standpoint Initiates Coverage with a Buy

  118. Grym(118083 comments)-
    February 24, 2009 at 1:29 pm

    yvrapx,

    After a wide swinging religious background. One parent was of mainline large denomination and one of quite a conservative and fundamentalist bent. It took me about 15 years of intense, serious study and soul searching, then I became an agnostic at around age 40.

    Rather than believing what is in the Bible is Truth, I believe much is in the Bible because people have found it to be True. Life is more difficult at times when you must decide for yourself, but is also more free.

    As for the corruption: We can take responsibility for our own behavior and only do our best at trying to get a fair shake for all.

    I still see the U.S. as the best chance to do this, but this is definitely NOT our finest hour.

  119. Grym(118083 comments)-
    February 24, 2009 at 1:52 pm
    • yvrapx(118083 comments)-
      February 24, 2009 at 3:10 pm

      Grym,
      No apology needed, very nicely put. All of us are free to believe as we see fit as long as it doesn’t harm others, intolerance of that freedom gets my hackles up.

  120. Craig(118083 comments)-
    February 24, 2009 at 2:09 pm

    “I decided:
    Whatever is really true will be so regardless of an individual or group belief, must be so regardless of the date or place or other circumstances and is beyond “knowing” in any objective sense.”

    I like this one Grym. Logical, intelligent….no assumptions or conjecture.
    It is what it is….and that is beyond our current understanding…or maybe not.

    That’s why it’s classified as “belief”.
    I do think we will reach a point where our thinking will evolve on this topic.
    Very slowly with fear of fanatic ignorance destroying us, or a portion of us.

    Hopefully the part about a God loving all of life will take root. Some regional Gods seem to be overly influenced by violent humans. :>(
    I’d like to see that reversed.

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