Morning Call [7:57am ET] Yesterday, right after 2:00pm ET, the S&P Equities versus TLT Bonds heavyweight match got real interesting. As Bonds was playing rope-a-dope in true Mohammed Ali fashion, Equities was in full-out press for a S&P 1200 knock-out. But, it didn’t happen; not yesterday anyway.
At 2:02pm ET TLT advanced with its chin out to 87.631, but the RSI-7 was extended to an extreme of 86.1. At that moment, S&P had pulled back to 1187.47 with its RSI-7 a fairly soft 44.2. Suddenly at 2:19pm TLT dropped back onto the ropes to a low of 87.36, its RSI-7 sinking to an extreme of 22.3. S&P surged forward at that very moment, reaching 1190.34 with its RSI-7 peaking at 91.2, moving at 2:38pm to a high point of 1191.75, its RSI-7 still up at 78.7. But, S&P then stumbled while TLT came on strong. By the end of the round, S&P appeared exhausted, dropping back to 1189.43, as TLT had its doubters trapped, closing at 87.61.
Whether that moment changed the fight’s momentum in favor of Bonds is anybody’s guess, but, now between rounds, we have time to review the action, and change our bets if we wish.
In yesterday’s morning call, I announced that I will soon be offering a long-only country- or sector-specific offering to small investors. My documents will be available in a few days. The decision on my part came when reviewing the performance of the past year. Two things stand out: (i) our long-short strategy, which uses put and call options extensively, plus holds a lot of cash during unstable or high-risk market times, has required a minimum account size of $250,000 since we can’t be putting a fraction of an option into somebody’s account, taking the small investor out of the picture, and (ii) a defensive long-short strategy by definition is going to far under-perform a long-only one in a soaring market – just as the long-only strategy slaughtered portfolios in a crashing market.
So, in order to expand client services to a higher-risk level for those who think that best, and to smaller accounts as well, I decided to focus in the next three months on the emerging markets of (i) India (ii) Latin America, and (iii) China, as well as junior gold miners, developers and prospectors, with a long-only approach. As stated yesterday, I’ll publish quarter-yearly Briefs on these, and, because the work does not require the minute to minute focus of an options based long-short strategy, I will personally take on portfolio management responsibilities within Cara Trading Advisors for these four areas, while Geoff and Patrick will remain focused on Cara 100/S&P 500 equities plus bonds.
Also, I think the timing is right to work directly with emerging markets and the junior golds: (i) the global economy is stabilizing, and, as it does, the fastest growth will be in these areas, and (ii) the financial system is still not fixed and so $USD could be under the constant pressure of quantitative easing for many years to come, which is an environment where precious metals prices, ebbing and flowing, will move higher in the end, with $GOLD possibly reaching prices of $2500-$3000 within a few years, making certain juniors very attractive take-over candidates.
So there you have it. Thank you for your interest.
By the way, I do not take credit for all you read in the CaraCommunity.com blog. In addition to so many insights and other contributions from the participants here, my team at CTA, Patrick in particular, has been adding to the editorial. Kudos must go to Patrick for his daily post-close observations and advise. In time, as I start to devote more of mine to long-only portfolio trading, there will be even more CTA teamwork involved, especially Monday through Friday in the blog and in the CTA Briefs. As you know, I love to spend my weekends on the macro stuff, taking a snapshot of the inter- and intra-market price action, plus economics, politics and whatever else comes to mind while normal people are out enjoying a weekly break from work.
This morning’s prices reflect, like yesterday at this time, a slightly stronger USD, and a tad weaker futures for crude oil and S&P whereas precious metals are slightly higher. There is a renewed focus on the financial problems of Greece, which have not been solved, just discussed by politicians…
http://www.reuters.com/article/idCALDE63610O20100407?rpc=44
Only a well-paid Talking Head can tell you that a politician is going to solve life’s problems, and still look good on the TV. The rest of us, being sick of it, would not look good while frowning and moaning. But, let’s keep those advertisers happy even if the drivel and crapola is nauseating to thinking people like us. In the end, the Greek problem will be managed by the market, not by politicians.
Have a great day.
CTA Trading Desk Post-Close Report
All traders were fixated on the US Treasury Bond auction on Wednesday, fearing a higher rate was needed to attract sufficient interest in the offering. With a daily RSI 7 of 25 yesterday, bonds (TLT +1.36%) were clearly oversold, positively diverging against the close of March 25 (lower low in price against a higher RSI reading) as it tested the key 4% interest rate level. Word must have circulated among bank traders early this morning that the auction would be well bid as prices rallied sharply prior to the release of the auction details. Circle the 87.50 or so level on TLT to watch and see if the oversold rally runs into supply relatively soon.
Gold had another big day (GLD +1.42%). Traders were clearly worried about the levels of public sector debt and loose fiscal policy in most developed-world economies. From the high last December (119.54) to the February low (102.28) GLD lost 17.26 points, generating a 618 retracement level of 112.94. The high today was 112.93 (close 112.44) meaning traders should consider lightening up a bit in this area and letting the market tell you its intentions. We sold some today not because we are necessarily bearish on gold, but because of prudent risk management. That is, by booking profits now we can repurchase into weakness and can always reestablish positions if gold begins to eat through resistance.
The equity markets were a tad softer today (SPX -0.60%), but once again the Bears fumbled the ball, unable to drive prices lower into the close. The S&P actually regained nearly half of its intraday sell-off in the final hour, a sign the buyers have not given up their resolve to accumulate stocks. The Bears need to get the momentum moving now on the downside (below 1165) or they will be forced to lick their wounds as eager buyers target the 1225 level.
Have a great evening.
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Comments
Cara 100 Ratings Changes
Good morning.
CHRW - FBR Capital Initiates Coverage with an Outperform.
NOK - Upgraded to Buy @ UBS
-----------
Zacks Analyst Report on TCK (Cara 100):
Value
Teck Resources Limited
By: Tracey Ryniec
April 07, 2010
TCK
Teck Resources Limited is profiting from the rise in commodity prices as it saw record revenue in the fourth quarter of 2009. TCK is trading with a forward P/E of 13.1.
Company Description
Teck Resources mines copper, metallurgical coal and zinc, molybdenum and specialty metals.
The company, headquartered in Canada and one of the largest miners in Canada, owns or has interests in 13 mines in Canada, the US, Chile and Peru. It is also actively exploring in the Americas, Asia/Pacific, Europe and Africa.
Teck Resources Contemplating Reinstating the Dividend
Teck Resources CEO Don Lindsay told Reuters on Mar 31 that its term loan, which it took on to finance the purchase of coal producer Fording in 2008 as the financial crisis took hold, will be gone in the very near term. Earlier this month the loan still totaled $800 million.
This would free up the company to consider reinstating the shareholder dividend, he said.
Teck Saw Record Revenue in Both 2009 and the Fourth Quarter
On Feb 8, Teck Resources reported fourth quarter results and saw record revenue for the quarter of $2.2 billion. The full year was also a record of $7.7 billion.
The company saw record production of copper at Quebrada Blanca and record zinc production at Red Dog and Antamina.
Net earnings for 2009 were the second highest ever at $1.8 billion compared with $659 million in 2008.
The company did miss on the Zacks Consensus Estimate by 12 cents. It has had a spotty record of surprising on estimates over the last 4 quarters but it has beaten 2 out of the last 4 quarters.
Teck Resources is expected to report first quarter results on Apr 20.
Zacks Consensus Estimates Rise
Analysts like what is going on with rising commodity prices and have been pushing up estimates as a result. Copper, for instance, is up sharply in the first three months of the year and has risen 80% in the last year.
The first quarter Zacks Consensus is up 2 cents to 48 cents in just the last 7 days as one estimate has moved higher.
The 2010 Zacks Consensus Estimate has risen 17 cents to $3.51 per share in the last week. One estimate has also moved higher during that time.
Analysts project earnings growth of 140.5% in 2010.
Value Fundamentals
Teck Resources is a Zacks #1 Rank (strong buy) stock. It has a price-to-book ratio of 2.1, which is below the industry average of 2.7. The company also has a stellar 5-year average return on equity (ROE) of 22%.
sounds like China is trying to slow growth
And everything depends on China for growth, because there is no such thing here, except for stagflation with a "growth" label pasted over it.
There was discussion of China tightening last night on CNBCw or Bloomberg, and I saw Shanghai was down, but it looks like it never made the news here that I can find.
Hard Assets Investment Conference-New York City May 10-11
Go to www.hardassetsny.com for details. It is a 2 day conference with about 50 gold miners exhibiting. Rob McEwen and James Dine will speak among others. They have some seminars both free and with a small fee. Very informative. I have registered and will be attending. I guess this is the road show of PDAC from Toronto.
I look forward to meeting McEwen of UXG and have several questions for him. If you are in to precious metals investing, I think you will enjoy this. Registration is free. It is being held at the NY Marriott Marquis in Times Square.
Good morning Bill, I have an
Good morning Bill, I have an account with you and have a quick question, will those in your managed options Long short accounts have to open a separate account with you in regards to your emerging market plans or will those ideas be incorporated into the long short accounts? Thanks
Good Interview with Rob McEwen
http://tinyurl.com/ycraa8j
Intuitive trading video with john lee
Titled "cognitive and emotional biases"
50 mins. long. will watch it once the market does its usual freeze up today
http://www.stocktwits.tv/charts-gone-wild-with-joh...
Re: sounds like China is trying to slow growth
cheapy,
Credit Suisse today issued the following statement in their report on China: Emerging property bubble. Due to price rises, affordability, a high percentage of investors versus consumers and potential bank loan exposure, we worry that a property bubble is emerging in China, and the government's credibility in managing the property market is reducing rapidly.
I don't know that this is a day to day concern, but certainly over the next year, there is a growing anticipation that property prices cannot continue rising like this, and the downside risk is very high.
Re: Good morning Bill, I have an
ebelog,
There will be a separate account grouping for these accounts as they cover a higher risk:reward mix. A document will be available in the next week.
Cara 100 Update (Final)
AAPL - estimates upped at UBS through 2011. iPhone sales are tracking ahead of expectations. Buy rating and $280 price target.
ICE - numbers lowered at UBS. Shares now seen reaching $125. Estimates also reduced, as pricing has likely dropped. Buy rating.
INTC - estimates boosted at UBS through 2011. Company has a strong new product cycle and should benefit from positive end-market trends. Buy rating and $30 price target.
SLB - Dahlman Rose Initiates Coverage with a Buy. PT = $88
XOM - estimates cut at Barclays. XOM 2010 and 2011 EPS estimates lowered to $5.70 and $7.00, respectively. Reiterate Overweight rating and $92, price target.
Re: sounds like China is trying to slow growth
Interesting. The way i see it. The 2001-2002 bust was followed by real estate bubble in US and worldwide. It took a few years for that to burst. Now, the 2007-2008 bust is followed by the same but housed in China and emerging markets. I wonder how long it is going to last?
Re: sounds like China is trying to slow growth
Does anyone have figures on average prices relative to average income?
Fast market gold and USD
Gold has popped while the $USD dropped at 9am ET
Re: sounds like China is trying to slow growth
Only what Mish posted (and someone re-posted here) about housing where in one individual's city the average income is $3,500 / year and the average 1000 sq/ft house (actually condo) is $90,000.
keeping an eye on pork producers
....
Happy to be in Cash
Just sitting and waiting for opportunities to come my way. The risk-reward to me in the short term is too skewed to the downside to be long.
China prices/trying to slow growth
TOF -Just a few place to start:
http://tinyurl.com/ycu8fnu
http://mpettis.com/
And yes, they are clearly trying to manage growth. When the command economy commands that banks rein in loan growth,especially in the RE sector, that is a sign that they want to get ahead of a potential spiral.
Re: sounds like China is trying to slow growth
This story was on NPR this weekend. They kept quoting 25 times yearly earnings.
Bob
Re: Happy to be in Cash
I'm still net long PM and miners. The action is quite pleasing but may not last long as the GLD:TLT is near absolute high and RSI(7) over 80. Looking to exit in the next several days or couple of weeks. The equity puts did not work as well as I thought, but it was supposed to be hedge after all. I'm planing to make some small money on the puts or at least take back my money in the next couple of days.
buyers/sellers
March may present all time record foreclosures... http://mhanson.com/blog
Re: sounds like China is trying to slow growth
found it... was on Bloomberg and posted to another blog...
http://www.bloomberg.com/apps/news?pid=20601087&si...
China Central Bank Said to Resume 3-Year Bill Sales (Update3)
Share Business Exchange
By Bloomberg News
April 7 (Bloomberg) -- China’s central bank will sell three-year bills tomorrow for the first time since June 2008 to drain cash from the world’s fastest-growing economy, traders at three of the nation’s largest banks said.........
Re: sounds like China is trying to slow growth
Thanks. This would explain the lower highs action on FXI today. EEM is following closely. I have in the money put on this one. The US stocks are slow to follow, but there should be a sizable dip considering how extreme the put/call ratio has been in the last couple of days.
FD: I'm talking about ST moves.
hard times ?
damn if I see any malnourished people in US television land...
Re: Fast market gold and USD
Looking at the daily picture, gold in euros has simply gone vertical. Check the daily chart: GLD:FXE.
SLV:FXE is looking quite strong also.
Re: Fast market gold and USD
This is the break out from a triangle forming since January 10. Volume is still low, so more action will follow. I'm not killing the goose yet, but will monitor in the next couple of weeks for signs of exhaustion.
Fed meeting
Id something bad came from the Fed meeting on Monday (like interest hike), we would have known by now, right?
Re: Fed meeting
I think the Fed said they haven't found any party out there to take the punch bowl away from, so we need to wait an extended period till one gets going. But that was a while ago...
Fear of deflation was the problem. They don't know a way to stop it without burying themselves in bad debt.
What do you bet they change their "extended period" tune this month on the run up in gold, oil, and gasoline? They can't just not notice the asset inflation...
DOW 11,000
final push coming? the bond auction was excellent.
Treasury's auction results
Wednesday, April 07, 2010 1:01:42 PM
*(US) TREASURY'S $21B 10-YEAR NOTE REOPENING DRAWS 3.900%; BID-TO-COVER RATIO: 3.72 V 3.45 PRIOR AND 2.96 OVER THE LAST 7
- Indirect bidders take 43.1% of competitive bids, with 99.62% allotted at high
- 16.3% go to Direct bidders; 40.6% go to Dealers
- Median 3.874%, Low 3.82%
OIL
Interesting how the fundamentals are terrible yet it keeps going up. Nothing will stop this market until the Fed decides so
Bonds, stocks, commodities cycles
Regarding the discussion on bonds going down, followed by stocks, the cycle is shown on Danielle Parks' Juggling Dynamite book. The Chart was originally based on Pring. Chart: http://2.bp.blogspot.com/_iV5yDiKxCdk/S7zUel-tMNI/...
After bonds going down, it would be stocks, then commodities, and the cycle goes on.
BTW, Ms. Park's book is a great read to understand the markets and how HB&B plays with you. She tells it as she sees it and withholds no punchs at HB&B. She states that you *should* time the markets, and shows how the stats HB&B says to the contrary are baloney. She comments on why the banks tell you that you should not be in cash (if you are in cash, they can't make their fees).
She asks why on earth would you buy something from someone paid to sell you investments or stocks. If someone tells you should buy a stock and he/she "has already bought some", run, don't walk, from the stock. Great comments on markets, the investment industry, and life in general. (Amazon link to her book: http://tinyurl.com/jugglingdyn).
She was on BNN March 31: http://watch.bnn.ca/the-street/march-2010/the-stre...
(No affiliation to Ms. Park.)
Re: Fed meeting
"They can't just not notice the asset inflation..."
It's never stopped them before. I think they'd much prefer it to deflation. Inflation gives those with access to the $ spigots lots of options for diversifying & setting up their own "exit strategies". Isn't deflation more of an equalizer for everyone?
CELM SEA.TO
I think it was TOF who mentioned CELM a week or so ago, I'm taking a ride on it, thanks, I wanted to acknowledge. (Have you done any dd on the company? (-:) Also SEA.TO, somewhere I read that there was a short squeeze in play. Something is moving it well.
GCI
Breaking out for real this time. I bought back in at $17.75. Earnings are coming up on Monday.
Re: Treasury's auction results
Econoday reports:
"Buyers have returned in force to Treasury coupon auctions. The April 10-year note auction, a reopening of the February 3.625 percent coupon, posted a bid-to-cover ratio of 3.72 for the highest rate in the last nine years of data.
The $21 billion auction stopped out at 3.900 percent, 3-1/2 basis points below the 1:00 bid. Retail demand was very strong with direct and indirect bidders taking down 59 percent of the auction vs. an average of 51 percent."
The best 10 year auction in 9 years comes immediately after the Fed stops printing money? Interesting timing. If I had more faith in the system I'd say it was sheer market perversity (too many people going short) but given how enthusiastically the Fed and the Treasury are trying to hide their operations, my feeling is there might be less fundamental buying going on here than meets the eye.
Re: hard times ?
Our city of 150,000 went from 185 families for Dec 2009 at one of the food pantries to over 400 families in by February of 2010.
Many people are in tough times with layoffs, hours cut and temp work all which is available here.
GRZ
Conference call at 4:30. Should provide some interesting insight into the Ven. circus.
GS
No way is this market rolling over with Goldman Sacks up $4
Consumer Credit - yikes!
2010 3:00:03 PM
*(US) FEB CONSUMER CREDIT: -$11.5B V -$700ME
- prior revised higher from +$5.0B to +10.6B
- Revolving credit -$9.4B -$1.7B prior (17th straight decline; longest decline on record);
UXG - My PM stock of the year-Update
I am finally able to put together some figures as to what UXG is really worth in terms of mineral value. UXG is a rather small company but has large land reserves both in Nevada and Mexico. They are spending most of their time drilling in Mexico which is a very extensive program.
Currently, UXG, trading at $3.07, is valued at $356 million. Their gold estimate, approximately 2 million ounces, has a value of $2,250,000,000. The silver estimate which is a low ball due to substantial findings almost daily in Mexico, is 8.47 million valued at $152 million. A combined preliminary net worth is 2.4 billion dollars. Thus the stock is valued at 15% of the mineral value. Therefore, I think this stock has a long way to run, especially if precious metal price forecasts are to be believed.
As Good As Gold?
http://www.zerohedge.com/article/latest-gold-fraud...
Thoughts?
Re: Fast market gold and USD
Gold in EUR is music to my ear, while it has still to make a new ATH in SEK, though that may not be far off now.
The problem I have with looking at money flow on charts of GLD is that GLD is not the gold market.
The same goes for TLT for that matter, as TLT is not the bond market.
Money flow on the GLD:TLT does seem to be trying to tell me something, and I watch it, but I don't trust it like I often do on individual stocks for this reason.
Bob Hoye has some interesting / different gold charts & perspectives:
Updates: Mid-March Lows in Precious Metals,
Megaphone, Deflated Prices & Multi-Year Base
http://www.321gold.com/editorials/hoye/hoye040710.pdf
Re: Consumer Credit - yikes!
Seems like this number is pretty volatile. Prior revision of double as high as reported!?!?
Re: Consumer Credit - yikes!
So TOF perhaps think less about the absolute number for CC reported this month, and instead focus on the trend. The trend is down, and has not yet reversed - 17 straight months of contraction. This bodes ill for consumer spending, ultimately, and I believe accurately reflects the (in)ability of consumers to service their current debt.
Re: GS
and as expected the PPT make sure no disorderly unwind happens. Watch the gap up in overnight futures
derivatives anyone?
I was impressed by GS's leverage. Huge brass cajones, raving stark mad, or sufficiently confident in their future to not consider derivative risk an issue? From Jessies:
http://1.bp.blogspot.com/_H2DePAZe2gA/S7zpCNV-ZbI/...
NPA results in increased consumer spending?
Intriguing article that asks the question: what if people who are not paying their mortgages (but are still in their houses) spending that money on consumer purchases?
http://www.housingwire.com/2010/04/05/for-consumer...
Re: As Good As Gold?
I can't imagine that anyone owning gold would trust a bank to hold it for them honestly without having it physically separate in a safety deposit box requiring 2 keys for access.
DISCO BALLS from last night
Kaimu,
Per your advice last night to own your home before investing elsewhere:
How many traders/investors do you know who actually own their homes outright? Most people have bought into our culturally ingrained myth otherwise known as The American Dream. To achieve the standard required, most people are hocked to the gills, investing on margin. They live on credit cards, paycheck to paycheck.
A famous vehicle for the 'wise investor' devised by the wizards at Countrywide (the infamous negative amortization Pay Option ARM) taught Investor A how to make money using OPM to build a portfolio and in time the value of said portfolio -- compared to boring brother B (who paid for his house before investing). Investor A could pay off their ballooning mortage balance with their exponential wealth the accumulated. Seriously. And people believed this.
Today's news blasts: "Foreclosures are good for the industry"(!) Ending the pain! Lowering property prices to put more people into homes! Creating buisness for realtors and brokers YEA!!!
Meanwhile, the Pay Option ARM homeowner who modifies their loan is locked into a cycle of paying interest on their interest for a ballooned balance ad infinitum. On a home worth less every day. Or walking with no hope of owning a home for the foreseeable future. The system is rigged people. Don't by the Dream. Realtiy is much more affordable.
UAUA & LCC
Multiple news outlets reporting that there are merger talks going on between United (UAUA) and US Airways (LCC). All airline stocks are up in AH including stocks of both UAUA and LCC.
Of note, as of 3/15/2010, there was a short interest of 34,483,862 shares in UAUA and 35,843,946 shares of LCC. Both stocks are up substantially after hours. Tomorrow should be interesting.
NLS
I figured I would take another look at this one because it seems to me like one of the more leveraged plays on a consumer spending recovery. In looking at the chart, it sure looks like the spike from the summer of 2009 caused resistance at around $2.9. This remained resistance until about February 2010. It then shot up and has been trending back. It bounced off the $2.9 level. I would think a good trade would be to buy with a stop at around $2.75. It's a big stop limit from today's levels...around 13%. But it might be a really good trade.
Re: UXG - My PM stock of the year-Update
papadynamite -
It's misleading to value an exploration junior's gold "in situ" at "retail". It's only worth $1130/oz. once pulled out of the ground, processed and refined.
And, you need to take into account the degree of resource definition established to date on UXG's deposits. I haven't followed them lately, but doubt whether they are "reserves" i.e. post feasibility study, with economic viability established.
Until a feasibility study is completed, you have no idea of whether the deposit is economical to mine. Preliminary to "reserves" are 3 categories of "resources". Gold "in situ" is valued at different "haircuts" from retail depending upon which resource category has been established through drilling and analysis.
Re: derivatives anyone?
Shouldn't this be expected? Taxpayers picked up the tab last time with a bit of help from former GS CEO, Paulson. After all they just had the best year ever and bonuses direct from God. With Bernanke and Timmy still in charge what do they have to fear.
BOHICA America!
Re: DISCO BALLS from last night
ALOHA!!
loannetter- Do you really think people listen to such tripe? HA!! Most people are addicted to debt, but like drug addiction it will tear your life apart and at some point you have to start detox. Some people commit suicide over their debt.
Well, that was my advice to the younger types who have yet to commit their lives to the American Dream and its "forever debt". Obviously as I said most people are going the route of hitting the "stock market jackpot" then paying their debt down. A lot has changed since then and many people are just walking away from their debt anchors, whether they are homes or credit cards. Obviously the whole credit score thingy does not have the same charm it once had on people.
At some point in your life you hit your maximum earning potential. For me it wasn't until I was 41. I suggest that when you do you pay down your debt and consider the conservative route to steer clear of banks and all their enticing games. One thing is for sure you can never retire so long as you have huge mortgage payments hanging over your head.
Wasn't it you who was touting some guy in Australia with a "debt system" to pay off debt quicker? I think that was last year you mentioned that. There you go!
I have tended to do the opposite of the system.
THE SYSTEM SAYS:
- Vote DEM or REP, I vote neither.
- Pay a mortgage for 30 years, I pay cash.
- Get in debt, I don't.
- Get a IRA and 401K, I don't.
- Live in the city, I move to the country.
- Watch TV, I don't.
- Say YES to the US FED, I say NO.
- Don't protest, I do.
Its not that I am against America and its financial system I am against the "people" who run it, which are the same people who write the rules. It is their government and their banks not mine. I believe there is a better America out there without the Bernankes, the Greenspans, the Obamas, the Bushs, the Geithners, the Summers, the Dimons, the Blankenfelds, the Fulds ... Obviously these people want America and Americans to be insolvent or else they wouldn't. All this can CHANGE in one day in November if we "want" ... Its not rocket science or political magic. Its the US Declaration Of Independence ... its our "rights", but if you do not believe you have "rights" then keep acting and voting like you don't. One day ...
Re: DISCO BALLS from last night
Great post, well said.
Re: DISCO BALLS from last night
Kaimu, as usual I agree with your comments, I hit my earning potential at 43, since then, and I am 56, tax reduction on income has been my main occupation.
On a different note, I had to see my natural path doctor, re a fungal infection that antibiotics do not cure. Low and Behold he had a sign up in his office "We accept payment in Gold and Silver" Well, not a problem, one ten ounce silver bar was whipped out for the visit. In Canada these guys are excluded from the health care system, so it is pay as you go.
"You are what you trade" Oh, I'm deficient in copper, and have FCX in my account.
Re: DISCO BALLS from last night
Kaimu said, I have tended to do the opposite of the system.
THE SYSTEM SAYS:
- Vote DEM or REP, I vote neither.
- Pay a mortgage for 30 years, I pay cash.
- Get in debt, I don't.
- Get a IRA and 401K, I don't.
- Live in the city, I move to the country.
- Watch TV, I don't.
- Say YES to the US FED, I say NO.
- Don't protest, I do."
I agree with most of what you say, here is where I disagree.
Theoretically not having a mortgage is a great idea, but the majority of citizens would never own a home if the mortgage market did not exist. Therefore it is a great benefit to society to have an opportunity to own a home even though it requires a debt obligation. The monstrosity occurred through people using their homes as atm machines to live beyond one's means instead of shelter for living in and for retirement.
Being self-employed, we maxed out Keogh Plans allowable by law for 17 of 25 years and made good contributions the other years in addition to IRA's. This is one of the best decisions we ever made for our retirement. Younger people please do not discount the ability to defer taxes on your investments. Of all the sage advice Kaimu gives, this is most off track. If you pick the correct location of your retirement, state taxes can be minimal to zero for these plans. In addition you have complete control over your investments and are not tied to some large corporation that becomes bloated with legacy retirement costs.
I would say that 95% of the population is not suited to living in Hilo, a different breed of soul. The country is nice.
From 1979 to 1985, I never watched TV, some of the greatest years of my life. Today internet is the new TV addiction for the more literate.
Again, Kaimu gives sage advice, I just differ strongly on mortgages and retirement plan strategies.
P.S. If you have cash by all means pay cash, but everyone is not as fortunate as others.
SPDR S&P China (GXC)
There has been a significant volume increase Monday and today in GXC trades, with price gains each day. Close today at 74.97. 52-week high is 76.40.
Re: SPDR S&P China (GXC)
Bill - I recently moved my 401k money into our emerging markets fund, which is about 20% China and 15 to 18% India from what I recall. China has underperformed of late, with the Shanghai composite still down about 10% or so from last summer. I bought into it because I believe it will begin outperforming, despite everyone's belief that it is a fraud.
GXC is interesting in that it has outperformed the Shanghai and Hang Seng of late.
Re: DISCO BALLS from last night
ALOHA!!
Telesatr3d - Thanks ... I will admit I am outside the box a lot. I was also fortunate to have had a very successful business so that I could afford to pay cash.
But ...
"Theoretically not having a mortgage is a great idea, but the majority of citizens would never own a home if the mortgage market did not exist."
You never "own" a home ... you just rent from the bank with a loan that can be "called" at any time.
" ... to defer taxes on your investments ... "
What tax rate will there be then? Capital gains rates are going up in 2011 and so will future income tax rates and taxable income levels and deductions will be cut. You have no "guarantees" with the US Tax Code. It used to be 2% ... I do not trust the government when it comes to the "future". They do not have a good track record so far. So you "divert" funds for some future retirement, while you ignore the huge cost of paying off your mortgage at a much slower rate. I prefer to take my tax hit at the cheaper rates now and get rid of my mortgage sooner. Pretty much a $200,000 home cost you $400,000 at the end of 30 years. What will your retirement account cost you in mortgage payments? There are always trade-offs to consider. Many people now facing forced retirement could have paid off their mortgage but are now stuck with retirement accounts half their value because they "deferred" paying off their mortgage in favor of "deferred" losses. No guarantees exist there either.
"I would say that 95% of the population is not suited to living in Hilo."
HA!! Yes Hilo, don't send us any more people, especially not 95%! Hilo is a nice city to live in and so is the surrounding area. There are downsides to living in any US city. We have tsunamis and a volcano. Oh well ... I live "high risk" in more ways than one!
I want to say to the youth to just think about things and not take what you are told as gospel. Question Authority ... Its okay to get outside the box and shake things up once in awhile. America is in desperate need of new blood and new ideas. What passes for "leaders" today is a National embarrassment.
Re: Fast market gold and USD
Thanks for the link to Hoye's report. I like it and it aligns perfectly well with my own research.
Re: NPA results in increased consumer spending?
Excellent point. One needs to calculate if the monthly payment saved, say $1,500 x 7 million households (roughly 120 billion per year) can indeed account for the recovery. I'm not sure, but it seems to provide a partial explanation to the discrepancy between the official numbers and the actual results compiled from the online purchase activity that seems to be dropping since last fall as I posted a couple of days ago.
Another interesting rumor I've heard was that 50% of luxury items purchased in China are for bribes for officials. That would sum the essence of Chinese recovery.
Jim Grant - David Rosenberg ... Debate on Treasuries....
... http://grantspub.com/about/jim.cfm
Greenspan's testimony today
http://tinyurl.com/ykph4qq
On page 6 he places blame on the GSE's:
"Of far greater importance to the surge in demand, the major U.S. government
sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, pressed by the U.S.
Department of Housing and Urban Development and the Congress to expand “affordable housing commitments,” chose to meet them in a wholesale fashion by investing heavily in subprime mortgage-backed securities."
PMV
ALOHA!!
Finally ...
It seems that PMI GOLD(PMV:TSXV) now has a high profile investor who sees some potential in this small company ... From today's news release:
"The Company has been advised that Macquarie Bank Limited, of Level 1, No. 1 Martin Place, Sydney, New South Wales, 2000, Australia, has acquired 33,333,333 common shares of the Company. The shares were purchased for investment purposes. After giving effect to the acquisition referred to above, Macquarie Bank Limited beneficially owns 33,333,333 common shares, representing 13.4% of the issued and outstanding common shares of the company on a partially diluted basis."
Macquarie Bank is part of Macquarie Group with some $245BIL AUD in assets. This is a global financial entity with some 13000 employees worldwide. This means an ASX listing is in the making. Those Aussies seem to like Ghana. PMV has one of the largest land holdings on two of the most prolific gold belts in Africa.
I own this company and have mentioned it here before ... As I explained at the CTA Bahamas Conference 2010 I use private placements(PP)to buy large blocks in such companies that are thinly traded, whereby you can also exercise warrants.
Re: DISCO BALLS from last night
I agree: people need to retrain their minds and consider more self reliant ways of living than typical American Dreamery (deceptions).
Yes, I published access to speed equity, a program which shows you where your money is going and how to gain control of it. Most people don't even balance their bank accounts these days. We prefer denial. However the 'system' rewards you for managing debt well ie getting into debt and staying there. That's what the FICO scoreing system watches. How well you pay up. Points for being an excellent yoked peon.
The deceptive thing about most consumer debt is most people don't see it in perspective and so it blows out of proprotion.
The deceptive thing about most so called news is we are lulled into thinking it is true.
The deceptive thing about voting along a two party system is it relieves us of contributing to own governance.
We have become lazy and now we pay the price for 'laissez faire'. By letting others make such collossal decisions and being willingly deceived by our cozy system--the system has very nearly toppled itself! (rumbling roar of applause in the distance from the direction of Hilo)
P.S. Most folks could never own a home without a little help from their friendly mortgage professional, thank you very much.
Re: DISCO BALLS from last night
Kaimu said, "I want to say to the youth to just think about things and not take what you are told as gospel. Question Authority ... Its okay to get outside the box and shake things up once in awhile. America is in desperate need of new blood and new ideas. What passes for "leaders" today is a National embarrassment."
I could not agree more, the road less traveled is certainly most interesting.
It is true that mortgages come at a cost, finance charges that are most generous to the banks. Still it is a better alternative than renting for life. If the mortgage market did not exist I would not own my home today, free and clear I might add.
I still think that retirement accounts are sound. Sure in hindsight if someone said you could have paid off your mortgage instead of losing 50% of your retirement plan they would taken the former, but life does not work like that. By having a combination of accounts you can manage your tax bracket so there are ways to minimize the tax bite.
Taxes are going up for two reasons we spend to much and have been living beyond our means for years. The reaper is coming to town and it is not pretty.
I think I will end with your motto "Question Authority." I have pretty much lived my life in that mode. Enjoy all that fresh fruit that grows in your neighborhood. T3D
Agency problem --- Soros' book
I was bored today at lunch and "browsed" the "George Soros CEU Lectures" book and was very suprised to read a chaper that had similarities of what BC has been echoing here about the agency problems in the financial sector. Of course Soros diverges from there and weighs in about how good Obama is and his views on the healthcare debate.....and we won't go there.
So, just interesting to note that even Soros has also mentioned this problem and acknowledges the social inequities that will continue to exist until this is fixed.
Re: Jim Grant - David Rosenberg ... Debate on Treasuries....
I was wondering if someone would post this debate by two respected pro's. The subject seems to be crucial at this point. Grant is the bond bear and DR says inflation is not in sight unless the debt is moneterized and also says most historical recessions do not apply due to the nature of this one as a financial blowup. Thus a bond bull saying the Fed is in a pickle and will stay with low rates until the cows come home. (They do come home eventually unless they die.) Grant explicitly declines to put a time frame on his prognostications. Rosenberg does not offer one either.
Only in the fullness of time will we know.
Fortunate Son
NOT!
http://www.youtube.com/watch?v=JBfjU3_XOaA&NR=1
http://www.youtube.com/watch?v=pAVhKjsImeI
Can we stop saying the collective "WE".
All apologies, but I am getting tired of hearing the collective "We". "WE" are in too much Debt. How "WE" spend too much. "WE" have become lazy. "WE" have lived beyond our means."WE" made and took bad loans. "We" sold lots of CDO's. Well the "WE" is not me. "WE" all have to clean up this mess to pay for the wild time "WE" had. Well i guess I missed out on the liquidity party and I am not the only one. There is a silent majority out there that had nothing to do with the excesses in our society that caused this economic crisis. I am tired of the media,the government, the bankers and the posters trying to spread responsibility to everyone by saying "WE" are all responsible for this mess by our irresponsibility. What kind of B.S. is that. Why don't "WE" take the one's that are really responsible and throw them in jail or line them up against the wall.
Bob
Re: Can we stop saying the collective "WE".
Bobbyo, I'm glad you are OK. Sorry to offend. I do feel strongly it will take a collective effort to correct our course.
Recommended Reading - Dr Elder
I haven't seen any trading/financial books mentioned for awhile, so I want to remind everyone who has not read, "Come into my trading room: A complete guide to trading," by Dr Alexander Elder to read the book.
Rarely do you find such a good trading book to read that does not put you to sleep and you look forward to reading and doesn't waste your time. It was on the old cara website recommend reading list, but I do not see any links here on the new site??? I know there were some others there, but I can't remember them.
We is a Nintendo Game
Where ever you go, there you are.
You can not throw people against the wall when they are the wall.
I was in Scottsdale AZ yesterday.... There is no economic crisis there.
Loannetter... I own my realestate... Hail to the ??? %
Just trade the prices and not your feelings.
OK
Jumping off my soap box now.
Blessings to Bill and his family.
We is a Nintendo Game
Where ever you go, there you are.
You can not throw people against the wall when they are the wall.
I was in Scottsdale AZ yesterday.... There is no economic crisis there.
Loannetter... I own my realestate... Hail to the ??? %
Just trade the prices and not your feelings.
OK
Jumping off my soap box now.
Blessings to Bill and his family.
DAS HAUS
ALOHA!!
Now we have the WARREN COMMISSION on the housing bubble!
The three days of FCIC hearings are focused on high-risk mortgage lending and the way trillions of dollars in risky mortgage debt was spread through the financial system. They are designed to provide a firsthand accounting of decisions that inflated a mortgage bubble and triggered the financial crisis.
Here's a guy that can testify before the FCIC about the mortgage fraud!
LINK: http://www.youtube.com/watch?v=bNmcf4Y3lGM
Hummmm ...
COPY CAT
ALOHA!!
Come on is this guy copying my posts and articles?
Now, About This Alleged Increase In Tax Withholdings By The Government...
Submitted by Tyler Durden on 04/07/2010 15:52 -050
We are a little confused by all the recent hype in the media about a surge in individual tax withholdings by the US Treasury. Our confusion is predicated primarily by the fact that this is patently not true. As regular readers are aware, we keep track of the primary source of this data, the Daily Treasury Statement which is the primary source for withholdings data, and, we observe that not only is there no secular or episodic boost in gross wittholdings (not net, we will run that report as well, although we have previously disclosed tha refunds in 2010 are actually way higher than 2009 so don't expecte that trend to change), but tax withholdings in 2010 continue to trend lower compared to the "abysmal" first quarter of 2009. Ironically so far 2010 is shaping up far worse than 2009, at least when it comes to tax withholding.
LINK: http://www.zerohedge.com/article/now-about-alleged...
Re: DAS HAUS
LMAO - best one yet
I have faith in people yet that we can take a serious film study of Hitler and use it as a parody like a mirror to see our own foolishness - full well respecting the gravity of the protaganist. I thought someone was trying to drag out old hatred, but these skits only leave ourselves to feel foolish for.
Re: DISCO BALLS from last night
Telestar, Kaimu,
It's not likely that one approach works for everyone — economic conditions, family responsibilities, health conditions — all effect our situations. But I would say that the "conventional wisdom" is designed for those who wish to benefit from herd behavior.
My wife and I began with a mortgage and conventional employment — I in an aerospace corporation, she in the city water dept. We bought our first house after only 3 months of marriage (new construction, only 960 sq. ft., a lot of sweat equity). I had been self-employed earlier and within 5 years started my business of the next 40 yrs.
Like Telestar I maxed-out Keogh. Social Security's Self-employment Tax (about 150% of other people) was the worst possible drag on my savings and investment, but we paid off the house (our second and present one) while in our early 30s.
I never thought of the house as an investment and didn't plan to move, so fluctuations in RE prices don't concern me.
The best advice I can give young people is to have a plan which suits your life and defer "wants" until they are affordable. Cash builds negotiating power—always has and is especially true right now.
Kaimu, "Question authority!" What I have told my sons for years — question everything and everyone — including me.
Cara 100 Ratings Changes
Good morning.
New Coverage:
MSFT - Soleil Initiates with a Buy. PT = $34
ORCL - Soleil Initiates with a Buy. PT = $30
ORCL - Janney Montgomery Scott Initiates with a Buy. PT = $32
---------
Zack's Analyst Report on TTM (Cara 100):
Growth & Income
Tata Motors
By: Rob Plaza
April 08, 2010
TTM
Tata Motors has a Zacks #1 Rank and trades at 16x fiscal 2011 consensus EPS estimates.
Growth and Income
Analysts estimate that Tata Motors will grow its EPS at 35% annually for the next 3 to 5 years. The stock also offers investors a dividend yield of 0.5%.
Company Description
Tata Motors is India's largest vehicle maker. It sells passenger cars under names including Indigo, Tata Nano, Jaguar, and Range Rover.
Recent Results
On January 29, Tata announced fiscal third-quarter net sales increased 89%. The auto maker had a net profit of $86 million, up 52% from the year-ago quarter.
Strong Sales Trends
In the last three months, Tata Motors has continued to report impressive sales. In January, Tata's auto sales grew 93% year-over-year. February sales climbed 48%, and March sales were up 38%.
Tata is scheduled to report fourth-quarter results on May 21.
Analyst Estimates Increasing
In the last two months, the Zacks Consensus Estimate for 2010 is up 14 cents, or 29.8%. The Zacks Consensus Estimate for 2011 increased 12 cents, or 11.3%. Analysts expect year-over-year EPS growth of 336% in 2010 and 93% in 2011.
The Chart
Tata Motors stock price sold-off about 15% from January through March. The dip was due to Daimler AG selling its 5.3% stake in Tata Motors for $408.9 million, which ended a 50-year old partnership. There were also fears with India implementing higher excise taxes on auto sales beginning in March.
TTM shares have rebounded sharply off its lows of the year. The stock is now up about 230% in the last twelve months and is trading near a 52-week high.
Re: DISCO BALLS from last night
Loannetter,
Your mention of credit rating raised a question for me. I've never checked my credit rating since I have no plan to borrow. We've paid off our single credit card each month (used only for convenience and points off of dining, etc.) We did borrow when last we bought a new car only because the dealer kncked off another $1,000 for using the manufacturers' credit service (paid it off after one monthly payment).
We check all statements for legitimacy.
Is there any reason to do a credit check which I am missing?
Re: Jim Grant - David Rosenberg ... Debate on Treasuries....
Illini,
I will certainly watch this video as I respect the opinions of each.
My thoughts re: bonds are the same as any other category — they are OK until a major trend change. I just sold my GNMA mutual fund which had been my parking place for cash off and on for over a year.
I'm still holding my high yield corp bond fund (paying7%+) after adding to it from GNMA sale.
The move above 4% on the 10-yr triggered my mental stop, but until the Fed actually raises rates I will continue swing trading TLT and TBT.
While I don't consider them as "Buy & Hold" for ever, I do own and intend to buy other dividend paying, consumer necessity type stocks when the price is eventually right.
Annual Credit Check
Grym.
If your credit score is not a concern then you would be well advised to run a free annual check (no scores offered) just to be sure no one is committing identity theft in your name. You would also see addresses listed that might indicate someone else using your Social Security Number. One client was listed as deceased (!).
http://www.annualcreditreport.com
Just click through to the free service (you don't have to buy any services). You can check all three bureaus at once or one bureau at a time. Then check another in a few months. Different creditors report to different bureaus so not all of your acoumts may turn up on Equifax for example. Every US consumer is entitled to one report per year for no charge. You are also entitled to a free report if you are ever denied credit so you can find out why you were denied.
Here's my blog on pulling your free credit report: http://netcredit.blogspot.com/2009/11/free-consume...