Cara's Commentary & Community Chat, Tues., Jan. 20, 2009

[6:35am ET] Today, the world will be watching African-Americans take their final steps to freedom. In celebration, I


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dirtydog
dirtydog
January 21, 2009 4:39 pm

Bill – I have a somewhat theoretical question. I understand your view that quantitative easing will cause the US dollar to weaken sometime in the future – perhaps massively. At that point we will experience inflation or perhaps even hyperinflation and that gold, oil and some other commodities will be the hedge. Due to deflation being the larger threat right now this is unlikely to occur in 2009. However, if hyperinflation does occur then I expect governments to hike interest rates severely in order to battle it. Under such situations, what do you think will be the best hedge? Commodities… Read more »

sandy
sandy
January 21, 2009 2:03 pm

Bill , I am hearing lot of chatter ( this was even when dow and s&p had reached the peak of this bear rally ) on a few blogs about the next big wave 5 about to occur. I heard it again on Bloomberg talk radio. While the targets varied, the folks calling the shorts were clear that the november lows will be taken out. The targets vary from 6000 to 6800 for dow and 600 – 640 for S&p. Does anyone follow elliotwave ? And how does one determine when the first wave begins especially since the market is… Read more »

sandy
sandy
January 21, 2009 1:49 pm

David and other cummunity members,
I read with interest and agreed about your comments on FAZ. I do see its down close to 8 dollars premarket.
I brought FAZ as well. Thank you for the trae idea !!

I am wondering whether this is a good time to sell or should we continue to hold. I am inclined to pull the trigger as the trade will cover part of my losses that I suffered yesterday.
Lost my shirt and my pants yesterday!

sandy
sandy
Reply to  sandy
January 21, 2009 1:51 pm

Decided not to wait for an answer
Cover my FAZ short that I sold short yesterday @88 for 78.35 for a quick profit of close to 10 dollars per share. Wish I had the guts to buy more..

sandy
sandy
Reply to  sandy
January 21, 2009 2:32 pm

Hmm. Sold too early again!!

Craig
Craig
January 21, 2009 1:27 pm

Bummer 2nd! UCO had an 11 handle yesterday after that nice buy point…but it looks like it will give you another chance. Patience! You are still up and can’t lose money…unless you ignore it again!

Oil looks a little stronger this AM, but XOM is showing a slightly negative divergence, so I picked up a few shares.

Agree with your Obama posts.

Like a job with a boss you *know* is intelligent and you can respect.
The last 8 have been like reporting to Gomer Pyle.

Grym
Grym
January 21, 2009 1:22 pm
sandy
sandy
Reply to  Grym
January 21, 2009 1:29 pm

Grym,
That is so true. The expectations on this president is very huge. And the circumstances will require Obama to brak away from the other Democrats,

Does he have the guts to do that ?
So far, quite a few appointment have surely been made based on inputs from the behind the scene Democrats.At least. that is way it looks like to me…

BillySundance
BillySundance
Reply to  sandy
January 21, 2009 1:57 pm

Sandy/Grim I certainly share your concerns regarding the future of the U.S. and the actions of this administration. But at the same time I feel very confident that the tide is turning to a responsible leadership that is working in the interests of the majority of U.S. citizens and doing so in the light of day. Obama has had to overcome some serious odds to get to this point. Some of the methods of change are still far from obvious but I can’t fault him yet – he has been in office 1 day. To get this far, Obama has… Read more »

sandy
sandy
Reply to  BillySundance
January 21, 2009 2:08 pm

Billy/Grym,
True, I would also give the benefit of doubt. But if he is not successful to the extent peopleexpect him to be, I will not castigate him.

I will start will sending him an email as they are planning layoff in the school my kid goes to as California is reeling under the budget crisis.

On one hand, everyone chants that kids are the future and on the other, they are cutting funding to public schools!

I would like to see the response. May not mean much. But I would like to see what happens.

swissrobinson
swissrobinson
January 21, 2009 1:21 pm

I’ve bugger all understanding of what the following will mean. What are the implications? Stronger dollar? Higher interest rates on bonds? More money flowing into US equities? >Fresh concerns about the British economy and fears for the stability of the UK’s financial system pushed sterling to new record lows against the dollar, euro and yen yesterday. One of the world’s leading investors voiced the markets’ concerns. Jim Rogers, of the Singapore-based Rogers Holdings and co-founder of the Quantum fund with George Soros, told Bloomberg Television: “I would urge you to sell any sterling you might have. It’s finished. I hate… Read more »

Grym
Grym
January 21, 2009 1:17 pm

CP,

I don’t think there is any way to accurately anticipate what will happen because too many factors are unique today. Protecting with stops is my only tactic since my retirement account won’t allow options and I have found the short and 2X ETFs unreliable. I’ve been tempted by SKF and SRS, but my current situation is totally defensive right now. TBT was a non-starter too.

I’m on jury duty for at least the rest of the week and it’s a bit like when I gave up smoking. Even though I’m not a day trader, I watch the markets regularly.

Bull Hunter
Bull Hunter
January 21, 2009 12:58 pm

Good morning.

Downgrades:

CHRW – to Market Perform @ Wachovia
VIP – to Neutral @ Credit Suisse
WMT – to Neutral @ Credit Suisse

New Coverage:

ADBE – Buy @ Soleil. Price Target = $27
FSLR – Buy @ Merriman Curhan Ford
GOOG – Outperform @ JMP. Price Target = $400

Also:

GE – Price Target Raised from $15 to $17 @ Oppenheimer
SU – Price Target Lowered from $17 to $13.50 @ Friedman Billings

alan
alan
January 21, 2009 12:03 pm

Totally agree.

And not, in any way, to minimize America’s essentially role in the very existence of this country, however I think if America had committed the $7 Trillion to independence from oil a) the Saudis wouldn’t have been such major contributors to every radical Muslim group threatening to cause trouble to the King and b)Iran would be nothing more than a boil on the world’s hiney.

mikede
mikede
January 21, 2009 11:43 am

I think we are on the same page.I don’t believe that the world can print this much money without huge inflation as always it is only a matter of timing. Good trading

Ron Sen
Ron Sen
January 21, 2009 11:38 am

http://tinyurl.com/762nrn

How big is the crisis? My diagnoses.

alan
alan
January 21, 2009 10:32 am

Submitted by swissrobinson on Wed, 01/21/2009 – 03:20. #7658 (Posted in reply to this comment (#7608)) “Just like the Israeli’s. Quitting their campaign for a US Presidential inauguration. How polite of them. I wonder who decided on that?” A bit of current events from an American who lives in Israel: Israeli elections in less than four weeks was the precipitating factor that caused the government to act. The incumbents wanted to have a chance at returning to power. (Israel is the ONLY democracy in the Middle East.) 8,000 missiles have been shot from Gaza into Israeli cities in the south… Read more »

swissrobinson
swissrobinson
Reply to  alan
January 21, 2009 11:51 am

Hi Alan,

Thanks for that. No belittling the aggression from Hamas and the right of Israel to respond.

Be that as it may, I suspect you’ll be looking for the bomb shelter all your life if this pattern of behaviour is to continue.

Peace to you and your Arab neighbours. I hope Obama, in winding down America’s interventionism in the Middle East can facilitate more meaningful action to aid the plight of the people of Israel and Palestine together.

Les.

davefairtex
davefairtex
January 21, 2009 8:48 am

I say rather the Israelis staged their assault on Gaza when Bush was focused on packing up his china and Obama was looking at color swatches and picking new drapes. (kidding about the drapes)

I’d say very strategic of them. I don’t think the timing was an accident. Isn’t it interesting how the whole operation fit neatly into the space between the two regimes, timing it for the maximum possible level of American distraction. Hats off to the strategic planners of that op.

I’m not approving, mind you. Nor am I disapproving. I’m just saying it was strategically well executed.

jacksoo
jacksoo
Reply to  davefairtex
January 21, 2009 9:23 am

Yes, if one were cynical you might think they’d been given a window in which to strike.

proudPapa
proudPapa
January 21, 2009 5:03 am

actually don’t look that bad right now considering the US Markets performance today. Most down around 1%, Shanghai is actually green…

abba1
abba1
January 21, 2009 4:47 am

tbt and gold up when market down 5%, different from november, bad sign that reflation may not work. i would legislate the invalidation of any credit default swaps other than those legitimately purchased to insure against default of an obligation owned by the purchaser. banks that bought 30 fire insurance policies on one house would be out of luck. that may not be constitutional but it will take 2 years to be determined in the courts, the crisis is immediate. explain how gas is up 15% since 1/1 while the market is down 10%, and crack spreads are going through… Read more »

abba1
abba1
January 21, 2009 4:34 am

tbt and gold up when market down big, different from november. this means to me that there is a feeling that maybe we can’t inflate ourself out of this. all credit default swaps other than those held by a legitimate owner of the underlying obligation to legitimately protect against default have to be declared invalid. immediately. institutions who bought 30 fire insurance policies on their house will lose the premiums they paid, too bad. at least that is what i would do. and the idea i had back in may that was ridiculed, the federal government should use that provision… Read more »

2nd_ave
2nd_ave
January 21, 2009 3:42 am

I don’t buy it. Obama exceeded expectations. Markets go up from here.

nemo
nemo
Reply to  2nd_ave
January 21, 2009 4:22 am

Oh 2nd. I believe him. As a matter of fact there was a reprint of an article on Boston.com yesterday that interviewed him in 1990 when he became the first African American/caucasian to head the Harvard Law Review. It was quite prescient and impressive. My concerns are more with the embedded interests. On one thing I do disagree. I think the idea of collective wisdom is over rated. The bell curve doesn’t lie.

bigwad1
bigwad1
January 21, 2009 3:05 am

A year ago these huge US banks that are all but broke today… were going over seas and borrowing billions of dollars from various foreign investment company’s in return for preferred shares. These foreign funds will be shaking a clenched fist at these huge US banks pretty soon. The outcome will be interesting to see played out on the talking road shows. US banks are going to need trillions of TARP dollars to keep the Saudi oil countries from cutting off the US oil supply completely. No wonder Citi is looking for a tanker to store oil. Their exec’s will… Read more »

fireworks
fireworks
January 21, 2009 2:49 am

Do not worry though as it only involved $1 billion that will soon be amply replenished through TARP 2, TARP 3…etc… General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker. According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to “complete the renovation of the line of products up to 2012.” “It wouldn’t be logical to withdraw… Read more »

NYUGrad
NYUGrad
January 21, 2009 2:34 am
nemo
nemo
January 21, 2009 2:26 am

I’ve got absolutely no axe to grind. I even like the guy…well, as much as I can like politicians. Words…that’s all we’ve heard. No particular specifics, understandably I think. Let’s see what gets delivered. Hope is not a strategy.

2nd_ave
2nd_ave
Reply to  nemo
January 21, 2009 3:35 am

nemo- I believe you. I have no axe to grind either. I just think sometimes we come across the real thing and spend too much time looking for/waiting for signs it’s anything other than what it is. A blind date that works out. A competent, understanding boss. The perfect job. No way, right? Well, it happens every day. As far as I know, I have no particular talent for reading people, but I’m not often wrong. A jury of peers is not often wrong. The American public, collectively, is not often wrong. I know that in general, hope is not… Read more »

Mackinaw
Mackinaw
January 21, 2009 3:32 am

One of the Country Exchange charts Bill didn’t post this morning is Iceland’s: http://www.bloomberg.com/apps/cbuilder?ticker1=ICE… View it in the 5 year frame. Down 93% from its high achieved July 20, 2007. I don’t know if Iceland has a mutual fund industry geared for retirement investing, but if they do, and like the home bias (i.e. overweight) that most “balanced” mutual fund investors worldwide face, I cringe at the carnage that so many hard-working, decent folks must have suffered during the last 18 months. Another, larger, market of note is Ireland: http://www.bloomberg.com/apps/cbuilder?ticker1=ISE… Down 75% during the last 18 months and, during the… Read more »

2nd_ave
2nd_ave
January 21, 2009 2:04 am

There wasn’t a single statement in Obama’s speech I can find fault with, and I recall my first impression(s) being one of being moved by each of his points, as well as impressed by his phrasing and choice of words. I’ll reserve final judgment pending follow through/the many revelations we’ll have in the coming months, but I don’t think he’s going to disappoint me. JMO.

UCO- Now that was a disappointment…I was watching the proceedings so intently I didn’t notice it was up 17% from my pre-market buy at one point…should have sold it; tough —-.

vinod
vinod
January 21, 2009 2:01 am

Few months ago we were at a friend house for dinner, both works at STT for over 25 years I was told to buy STT; it is very cheap and will double in couple year. I said no interest to buy and hold any bank, trading purpose I might do it I just got called from them, crying. They have been wipeout in STT. Since they are working there and know the bank good they did not expected this. Now they think it may go to $5 within year if situation does not improve Question here is it is very… Read more »

bsi87
bsi87
Reply to  vinod
January 21, 2009 2:24 am

one must have patience, do his work, control risk thru correct entry/position size, etc. And not listen to the news or others who have their own agendas/issues. Unless your friends are on the BOD, it’s unlikely they would be privy to the “news”. On the other hand, STT has traded sideways since the fall while the SPX rallied roughly 25% in the same time period. THAT should have been at least a flashing yellow light. STT has just about capitulated. RSI 7 day is 10.23. Max pain is 45 for Feb so there’s some upward pull there at some point.… Read more »

teamonfuego
teamonfuego
Reply to  bsi87
January 21, 2009 2:45 am

I would actually consider buying STT. I have followed their off balance sheet assets and they did actually perform well and the ones that matured in 2008 were paid off in full. They have had to mark these down to the market value despite them performing well, so they’re in a catch 22. The crux of the investment decision is how much of an impact on their institutional deposits will get scared off and pull their assets from them. This part of business is confidence driven. But I think it will do ok. They do a ton of back office… Read more »

bsi87
bsi87
January 21, 2009 1:48 am

Bill

It’d be great if there is a webcast for those of us who can’t attend either on a time delay or a nominal fee for real time.

2nd_ave
2nd_ave
Reply to  bsi87
January 21, 2009 2:33 am

In total agreement. Just guessing, but the expense of hiring a videographer would IMO be more than offset by a nominal fee (or perhaps the nominal fee can be set based on expenses and [initial] demand). To be fair to Vad, a separate fee to view his seminars would be in order.

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